Broadcom (NASDAQ:AVGO) Stock Price Up 3% - Still a Buy?

Key Points

• Broadcom shares rose 3% to about $357.67 on Friday, with trading volume 73% above average, but the stock remained below its 50-day and 200-day moving averages.
• The bullish case centers on Broadcom’s custom AI-chip and networking opportunity: management projects AI semiconductor revenue of approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028. Analysts broadly remain positive, with a “Moderate Buy” consensus and an average price target of $509.04.
• Risks include customers such as Meta developing more in-house AI chips and uncertainty around VMware’s enterprise demand. Broadcom recently exceeded quarterly earnings and revenue estimates, while insiders have sold more than $20.8 million of stock over the past 90 days.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report)'s stock price was up 3% during trading on Friday . The stock traded as high as $363.28 and last traded at $357.6680. 43,838,015 shares changed hands during trading, an increase of 73% from the average session volume of 25,319,012 shares. The stock had previously closed at $347.30.

Key Stories Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom’s custom-chip opportunity remains the central bullish catalyst. Management expects AI semiconductor revenue to reach approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028, suggesting substantial growth from hyperscaler demand for application-specific chips and networking technology. The AI Boom Isn’t Over: 3 Stocks You Need to Watch
• Positive Sentiment: Several reports characterize AVGO as a potential beneficiary of the next phase of AI spending, as customers seek alternatives to Nvidia’s GPUs to improve computing costs, power efficiency, and control. Some commentators believe Broadcom could gain share as Nvidia’s dominance eventually moderates. Here’s When Nvidia’s Dominance Fades, Opening Broadcom’s Era of Dominance
• Positive Sentiment: Jim Cramer called Broadcom potentially “too cheap to ignore” after its roughly 30% retreat from its peak. Other analysts and investment articles likewise argue that strong AI growth, repeated earnings beats, and a lower valuation have improved the risk-reward profile. Jim Cramer on Broadcom: The Stock May Be Too Cheap to Ignore
• Positive Sentiment: Broadcom’s chief executive, Hock Tan, reportedly expressed little concern about recent AI “extinction” fears, reinforcing the company’s confidence in sustained customer demand and its long-term AI strategy. Broadcom CEO Hock Tan Says He Isn’t Worried
• Neutral Sentiment: Investor attention is elevated as markets weigh whether Broadcom’s strong AI orders and forecasts will translate into near-term share-price gains. The stock remains below its 50-day and 200-day moving averages, highlighting continued technical pressure despite the fundamental optimism. Investors Want to Know When Broadcom’s Custom Hyperscaler Chips Will Move Share Prices
• Negative Sentiment: Risks include evidence that major customers such as Meta may use more internally developed AI chips, potentially reducing reliance on third-party suppliers. In addition, data on enterprise demand for VMware private-cloud software is mixed, making the software-growth thesis less certain. Enterprise AI to Boost Broadcom’s Software Business

Wall Street Analyst Weigh In

Several equities research analysts have weighed in on AVGO shares. DA Davidson set a $350.00 price objective on Broadcom and gave the stock a "neutral" rating in a report on Friday, September 4th. Oppenheimer reiterated an "outperform" rating and set a $535.00 price target (up from $450.00) on shares of Broadcom in a research report on Thursday, June 4th. Truist Financial lowered their price objective on shares of Broadcom from $550.00 to $520.00 and set a "buy" rating for the company in a report on Thursday, September 3rd. Weiss Ratings cut Broadcom from a "buy (b)" rating to a "buy (b-)" rating in a research report on Thursday, July 30th. Finally, Susquehanna reiterated a "positive" rating and set a $490.00 target price (up from $450.00) on shares of Broadcom in a report on Thursday, May 28th. One investment analyst has rated the stock with a Strong Buy rating, twenty-eight have given a Buy rating and four have issued a Hold rating to the company's stock. According to MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus price target of $509.04.

Broadcom Stock Performance

The company has a debt-to-equity ratio of 0.57, a quick ratio of 2.29 and a current ratio of 2.50. The business's 50-day moving average is $379.76 and its 200-day moving average is $379.16. The company has a market capitalization of $1.71 trillion, a PE ratio of 45.68 and a beta of 1.44.

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

Broadcom Dividend Announcement

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

Insider Buying and Selling at Broadcom

In other Broadcom news, Director Justine Page sold 1,602 shares of the business's stock in a transaction on Monday, June 29th. The stock was sold at an average price of $373.86, for a total value of $598,923.72. Following the sale, the director directly owned 17,426 shares of the company's stock, valued at approximately $6,514,884.36. The trade was a 8.42% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, insider Mark Brazeal sold 25,000 shares of the stock in a transaction 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. This represents a 11.36% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 53,492 shares of company stock worth $20,840,292. 1.90% of the stock is owned by insiders.

Institutional Trading of Broadcom

Several institutional investors have recently bought and sold shares of the company. Cornerstone Advisors LLC acquired a new position in shares of Broadcom during the second quarter valued at approximately $92,522,000. Bank of America Corp DE lifted its position in shares of Broadcom by 1.5% in the first quarter. Bank of America Corp DE now owns 58,737,097 shares of the semiconductor manufacturer's stock valued at $18,179,719,000 after acquiring an additional 894,564 shares in the last quarter. Clear Harbor Asset Management LLC acquired a new stake in shares of Broadcom in the second quarter worth approximately $3,302,000. Bartlett & CO. Wealth Management LLC increased its position in shares of Broadcom by 129.3% during the first quarter. Bartlett & CO. Wealth Management LLC now owns 110,048 shares of the semiconductor manufacturer's stock worth $34,061,000 after purchasing an additional 62,050 shares in the last quarter. Finally, First Bank & Trust raised its stake in Broadcom by 17.2% in the 2nd quarter. First Bank & Trust now owns 10,503 shares of the semiconductor manufacturer's stock valued at $3,968,000 after purchasing an additional 1,545 shares during the last quarter. 76.43% of the stock is owned by hedge funds and other institutional investors.

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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