Broadcom (NASDAQ:AVGO) Shares Up 1.8% - Time to Buy?

Key Points

• Broadcom shares rose 1.8% to $334.59 amid renewed buying in AI and semiconductor stocks, though trading volume was below average and the price remains under its 50- and 200-day moving averages.
• Analysts maintain a bullish outlook, with a consensus “Moderate Buy” rating and an average price target of $527.20; recent targets were raised as high as $715.
• Broadcom’s AI growth case is supported by strong custom-chip and networking demand, with CEO Hock Tan expecting AI-compute demand to exceed supply through 2029 or 2030. The company also exceeded quarterly earnings and revenue estimates, reporting 85.5% year-over-year revenue growth.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report)'s share price was up 1.8% during mid-day trading on Monday. The company traded as high as $340.20 and last traded at $334.59. 17,100,606 shares were traded during trading, a decline of 32% from the average daily volume of 24,994,219 shares. The stock had previously closed at $328.75.

Trending Headlines about Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom benefited from renewed buying across AI stocks after a recent pullback. Institutional investors appear to be reducing bearish positions and adding exposure to semiconductor instruments, suggesting confidence that the AI hardware cycle remains intact. High-Voltage Capital Floods Chip Stocks
• Positive Sentiment: Analysts and bullish commentators continue to point to substantial upside for Broadcom, citing its custom-chip business, AI networking exposure, strong cash generation and demand from hyperscale customers. Some coverage argues the stock’s underperformance and decline from its high have created a more attractive entry point. Broadcom Went Nowhere for a Year
• Positive Sentiment: GF Securities said a reported delay to Alphabet’s next TPU should not materially weaken Broadcom’s position among Google’s custom-chip partners. This reduces concern that a major customer delay will significantly affect Broadcom’s AI opportunity. Google TPU Delay and Broadcom
• Positive Sentiment: Broadcom CEO Hock Tan expects AI-compute demand to exceed supply through 2029 or 2030, supporting a long-duration growth outlook for custom accelerators and networking silicon. Broadcom CEO on AI Demand

Analyst Upgrades and Downgrades

Several equities research analysts have recently commented on the stock. Wall Street Zen downgraded shares of Broadcom from a "strong-buy" rating to a "buy" rating in a research note on Saturday, July 18th. Lake Street Capital upgraded Broadcom to a "buy" rating in a research note on Thursday, September 3rd. BNP Paribas Exane raised their target price on Broadcom from $675.00 to $715.00 and gave the stock an "outperform" rating in a research note on Friday, September 4th. Arete Research lifted their price target on Broadcom from $488.00 to $530.00 and gave the stock a "buy" rating in a research report on Tuesday, July 21st. Finally, Rosenblatt Securities began coverage on Broadcom in a research note on Thursday, September 3rd. They set a "buy" rating and a $600.00 price target on the stock. One research analyst has rated the stock with a Strong Buy rating, thirty-seven have issued a Buy rating and three have assigned a Hold rating to the company's stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $527.20.

Broadcom Price Performance

The firm has a market capitalization of $1.60 trillion, a PE ratio of 42.73 and a beta of 1.46. The firm's fifty day moving average price is $364.33 and its 200 day moving average price is $384.14. The company has a current ratio of 2.50, a quick ratio of 2.29 and a debt-to-equity ratio of 0.57.

Broadcom (NASDAQ:AVGO - Get Free Report) last issued its earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.22 by $0.10. The firm had revenue of $29.59 billion during the quarter, compared to analysts' expectations of $29.24 billion. Broadcom had a net margin of 42.94% and a return on equity of 48.33%. The firm's revenue was up 85.5% compared to the same quarter last year. During the same quarter last year, the company posted $1.69 earnings per share. As a group, equities analysts forecast that Broadcom Inc. will post 10.37 earnings per share for the current year.

Broadcom Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Shareholders of record on Monday, September 21st were paid a dividend of $0.65 per share. The ex-dividend date was Monday, September 21st. This represents a $2.60 dividend on an annualized basis and a dividend yield of 0.8%. Broadcom's dividend payout ratio (DPR) is presently 33.21%.

Institutional Trading of Broadcom

A number of hedge funds have recently modified their holdings of AVGO. Legal & General Group Plc purchased a new stake in shares of Broadcom during the second quarter worth about $11,998,148,000. Bank of New York Mellon Corp purchased a new position in shares of Broadcom during the second quarter valued at approximately $10,528,191,000. Jupiter Topco LLC purchased a new position in shares of Broadcom during the second quarter valued at approximately $7,396,271,000. State Street Corp lifted its stake in shares of Broadcom by 8.7% during the second quarter. State Street Corp now owns 208,031,610 shares of the semiconductor manufacturer's stock valued at $75,367,711,000 after buying an additional 16,651,378 shares during the period. Finally, Deutsche Bank AG acquired a new stake in Broadcom during the second quarter worth approximately $5,661,216,000. Hedge funds and other institutional investors own 76.43% of the company's stock.

About Broadcom

Broadcom Inc NASDAQ: AVGO is a global technology company that designs, develops and supplies semiconductor and infrastructure software products. Its semiconductor solutions support data center, networking, broadband, wireless communications, storage, industrial and other electronic applications.

The company's semiconductor portfolio includes networking and switching components, custom accelerators, connectivity and wireless devices, broadband equipment, optical products, storage controllers and related infrastructure technologies.

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