Broadcom (NASDAQ:AVGO) Shares Down 2.6% - Should You Sell?

Key Points

• Broadcom shares fell 2.6% to about $354 amid broader risk-off pressure on semiconductor and high-valuation growth stocks, while China’s reported review of Broadcom networking hardware adds geopolitical and regulatory risk.
• Management remains highly bullish on AI, projecting semiconductor revenue of roughly $115 billion in fiscal 2027 and $230 billion in fiscal 2028, driven by custom chips, networking and inference infrastructure. The main risk is whether Broadcom can convert these ambitious forecasts into sustained orders and earnings growth.
• Despite the decline, analysts maintain a Moderate Buy consensus with an average price target of $509.04; Broadcom also reported revenue growth of 85.5% year over year and beat quarterly EPS estimates, though its valuation remains elevated at a P/E of 45.34.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report) shares dropped 2.6% during mid-day trading on Wednesday . The stock traded as low as $354.01 and last traded at $354.99. Approximately 22,366,312 shares traded hands during trading, a decline of 12% from the average session volume of 25,298,529 shares. The stock had previously closed at $364.54.

Key Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom’s management continues to forecast substantial growth in AI semiconductors, with projected revenue of approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028. The outlook is supported by demand for custom AI chips, networking equipment and inference infrastructure. The AI Boom Isn’t Over: 3 Stocks You Need to Watch
• Positive Sentiment: CEO Hock Tan defended Broadcom’s roughly $350 billion AI opportunity, arguing that customer relationships focused on AI inference can sustain growth even as some investors question the pace of frontier-AI spending. Broadcom CEO Holds $350B Outlook Strong
• Positive Sentiment: Several investment articles remain bullish on AVGO, citing custom-chip demand, major AI customers, dividend growth and the possibility that earnings growth could eventually catch up with the stock’s valuation. Broadcom: Hard To Ignore The Numbers
• Neutral Sentiment: The key investment question is execution: Broadcom must convert ambitious AI projections into customer orders, production and sustained earnings growth. This creates significant upside potential but also leaves the stock sensitive to high expectations. Can Execution Catch Up With Expectations at Broadcom?
• Negative Sentiment: Chinese authorities are reportedly reviewing Broadcom networking hardware used in state-backed data centers as Beijing seeks to promote domestic semiconductor suppliers and reduce reliance on foreign AI infrastructure. The review raises potential regulatory, revenue and geopolitical risks. China Surveys Broadcom Switch Use in State Data Centers
• Negative Sentiment: Broader risk-off trading also pressured semiconductor stocks as oil prices and Treasury yields rose following a four-session equity rally, encouraging investors to reduce exposure to high-valuation growth names. Why Are Intel, AMD and Broadcom Stocks Down?

Wall Street Analyst Weigh In

Several equities research analysts have recently issued reports on the company. Truist Financial decreased their price objective on Broadcom from $550.00 to $520.00 and set a "buy" rating on the stock in a report on Thursday, September 3rd. Fox Advisors upgraded Broadcom to an "outperform" rating in a report on Thursday, September 3rd. JPMorgan Chase & Co. increased their price objective on shares of Broadcom from $500.00 to $580.00 and gave the stock an "overweight" rating in a report on Thursday, June 4th. Wall Street Zen lowered shares of Broadcom from a "strong-buy" rating to a "buy" rating in a research report on Saturday, July 18th. Finally, Benchmark increased their price target on shares of Broadcom from $485.00 to $545.00 and gave the stock a "buy" rating in a research note on Thursday, June 4th. One investment analyst has rated the stock with a Strong Buy rating, twenty-eight have given a Buy rating and four have assigned a Hold rating to the company's stock. Based on data from MarketBeat, Broadcom has a consensus rating of "Moderate Buy" and a consensus price target of $509.04.

Broadcom Stock Down 2.6%

The firm has a 50-day simple moving average of $377.99 and a 200 day simple moving average of $380.11. The company has a debt-to-equity ratio of 0.57, a current ratio of 2.50 and a quick ratio of 2.29. The company has a market capitalization of $1.69 trillion, a PE ratio of 45.34 and a beta of 1.44.

Broadcom (NASDAQ:AVGO - Get Free Report) last posted its earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $3.22 by $0.10. Broadcom had a return on equity of 48.33% and a net margin of 42.94%.The business had revenue of $29.59 billion during the quarter, compared to analyst estimates of $29.24 billion. During the same quarter last year, the firm earned $1.69 earnings per share. The company's revenue for the quarter was up 85.5% compared to the same quarter last year. On average, research analysts predict that Broadcom Inc. will post 10.36 EPS for the current fiscal year.

Broadcom Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Wednesday, September 30th. Investors of record on Monday, September 21st will be paid a $0.65 dividend. This represents a $2.60 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date is Monday, September 21st. Broadcom's dividend payout ratio (DPR) is 33.21%.

Insider Activity at Broadcom

In other news, insider Mark Brazeal sold 25,000 shares of the business's stock in a transaction that occurred on Friday, July 10th. The stock was sold at an average price of $401.33, for a total value of $10,033,250.00. Following the completion of the sale, the insider directly owned 194,989 shares in the company, valued at approximately $78,254,935.37. The trade was a 11.36% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Gayla J. Delly sold 1,890 shares of the company's stock in a transaction that occurred on Wednesday, July 8th. The shares were sold at an average price of $385.38, for a total value of $728,368.20. Following the sale, the director directly owned 31,326 shares in the company, valued at approximately $12,072,413.88. This represents a 5.69% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 53,492 shares of company stock valued at $20,840,292 over the last three months. 1.90% of the stock is owned by insiders.

Institutional Trading of Broadcom

Institutional investors and hedge funds have recently modified their holdings of the business. Fullerton Advisors LLC increased its position in shares of Broadcom by 1.3% during the first quarter. Fullerton Advisors LLC now owns 1,989 shares of the semiconductor manufacturer's stock worth $616,000 after acquiring an additional 25 shares during the last quarter. NORTHSTAR ASSET MANAGEMENT Co increased its holdings in Broadcom by 0.5% during the 1st quarter. NORTHSTAR ASSET MANAGEMENT Co now owns 5,350 shares of the semiconductor manufacturer's stock worth $1,656,000 after purchasing an additional 25 shares during the last quarter. RFG Holdings Inc. raised its position in shares of Broadcom by 0.3% in the 1st quarter. RFG Holdings Inc. now owns 8,499 shares of the semiconductor manufacturer's stock valued at $2,631,000 after purchasing an additional 26 shares in the last quarter. Yukon Wealth Management Inc. boosted its stake in shares of Broadcom by 1.1% during the 1st quarter. Yukon Wealth Management Inc. now owns 2,501 shares of the semiconductor manufacturer's stock valued at $774,000 after buying an additional 26 shares during the last quarter. Finally, NerdWallet Wealth Partners LLC grew its position in shares of Broadcom by 2.6% during the second quarter. NerdWallet Wealth Partners LLC now owns 1,057 shares of the semiconductor manufacturer's stock worth $399,000 after buying an additional 27 shares in the last quarter. 76.43% of the stock is owned by institutional investors and hedge funds.

About Broadcom

Broadcom Inc NASDAQ: AVGO designs, develops and supplies semiconductor and infrastructure software products for businesses, telecommunications providers and other organizations worldwide. Its semiconductor portfolio includes networking and connectivity components, custom application-specific integrated circuits, broadband and wireless communications products, storage adapters, optical components, and industrial solutions.

The company also provides enterprise infrastructure software through businesses including VMware, which offers virtualization and private- and hybrid-cloud solutions; mainframe and enterprise software; and cybersecurity products.

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