Broadcom (NASDAQ:AVGO) Trading Down 1.6% - Here's What Happened

Key Points

• Broadcom shares fell 1.6% to $339.27 in midday trading, with volume below its daily average and the stock trading below its 50-day and 200-day moving averages.
• Analysts remain broadly bullish, with a consensus “Moderate Buy” rating and an average price target of $509.04. Piper Sandler cited custom AI-chip demand at roughly twice available supply and initiated coverage with a $460 target.
• Broadcom’s latest quarter exceeded expectations, with adjusted earnings of $3.32 per share and revenue of $29.59 billion, up 85.5% year over year. However, investors continue to weigh AI-related margin, financing, customer-concentration and infrastructure-spending risks.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report)'s stock price fell 1.6% on Tuesday . The stock traded as low as $337.90 and last traded at $339.27. Approximately 23,198,483 shares traded hands during mid-day trading, a decline of 8% from the average daily volume of 25,238,791 shares. The stock had previously closed at $344.72.

More Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom CEO Hock Tan rejected concerns about an AI slowdown and reaffirmed the company’s long-term revenue outlook, supporting the view that demand from hyperscale customers remains strong. Broadcom CEO dismisses AI slowdown concerns
• Positive Sentiment: Piper Sandler said demand for Broadcom’s custom AI chips may be roughly twice available supply and estimated the company holds about 75% of the AI-inference ASIC market. The firm initiated coverage with an Overweight rating and a $460 price target. Broadcom’s real constraint is supply
• Positive Sentiment: Bullish commentary highlights AI revenue growth of 221% year over year, improving cash generation and potential for Broadcom to join the next trillion-dollar group. Its dividend also gives investors an income component alongside AI exposure. Broadcom could join the next trillion-dollar club
• Neutral Sentiment: Comparisons with Credo and Vertiv frame Broadcom as a larger, more diversified AI-infrastructure provider, but with slower expected growth and a higher valuation. Investors are weighing its scale and customer relationships against concentration and execution risks. Credo versus Broadcom
• Negative Sentiment: Analysts have raised concerns that sustaining rapid AI expansion could pressure margins and require additional financing. Customer concentration and the risk of weaker-than-expected infrastructure spending also make the shares vulnerable after their earlier rally. Broadcom’s AI growth faces margin and financing risks
• Negative Sentiment: Broadcom has been pressured by a wider semiconductor selloff and renewed debate over the pace of AI spending, compounded by uncertainty ahead of Federal Reserve policy decisions. The shares remain below their recent high and below their 50-day and 200-day moving averages. Semiconductor stocks fall amid AI spending concerns

Analyst Ratings Changes

Several research analysts have commented on the stock. Cantor Fitzgerald increased their price objective on shares of Broadcom from $525.00 to $600.00 and gave the company an "overweight" rating in a research report on Thursday, September 3rd. Lake Street Capital upgraded shares of Broadcom to a "buy" rating in a report on Thursday, September 3rd. Evercore set a $578.00 price objective on shares of Broadcom in a research report on Thursday, September 3rd. The Goldman Sachs Group reiterated a "buy" rating on shares of Broadcom in a research note on Monday, August 3rd. Finally, Oppenheimer reissued an "outperform" rating and issued a $535.00 target price (up from $450.00) on shares of Broadcom in a report on Thursday, June 4th. One 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. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $509.04.

Broadcom Price Performance

The stock has a market capitalization of $1.62 trillion, a price-to-earnings ratio of 43.33 and a beta of 1.44. The company has a quick ratio of 2.29, a current ratio of 2.50 and a debt-to-equity ratio of 0.57. The stock has a fifty day moving average of $382.45 and a 200-day moving average of $378.79.

Broadcom (NASDAQ:AVGO - Get Free Report) last released 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. The company had revenue of $29.59 billion for 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 for the quarter was up 85.5% on a year-over-year basis. During the same quarter last year, the company earned $1.69 earnings per share. On average, equities research analysts predict that Broadcom Inc. will post 10.36 EPS for the current fiscal year.

Broadcom Announces Dividend

The business 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 dividend of $0.65 per share. This represents a $2.60 annualized dividend and a yield of 0.8%. The ex-dividend date is Monday, September 21st. Broadcom's dividend payout ratio (DPR) is currently 33.21%.

Insider Activity at Broadcom

In other Broadcom news, insider Mark Brazeal sold 25,000 shares of the company's stock in a transaction on Friday, July 10th. The shares were sold at an average price of $401.33, for a total value of $10,033,250.00. Following the completion of the transaction, the insider owned 194,989 shares in the company, valued at $78,254,935.37. This represents a 11.36% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director Gayla Delly sold 1,890 shares of the firm's stock in a transaction dated Wednesday, July 8th. The stock was sold at an average price of $385.38, for a total value of $728,368.20. Following the transaction, the director directly owned 31,326 shares in the company, valued at approximately $12,072,413.88. The trade was a 5.69% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 58,317 shares of company stock valued at $22,745,733 over the last ninety days. Insiders own 1.90% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the company. Geode Capital Management LLC increased its position in Broadcom by 1.4% in the fourth quarter. Geode Capital Management LLC now owns 111,277,280 shares of the semiconductor manufacturer's stock worth $38,396,634,000 after purchasing an additional 1,548,699 shares during the period. Norges Bank acquired a new position in Broadcom during the 4th quarter valued at about $24,252,196,000. Bank of America Corp DE boosted its stake in shares of Broadcom by 4.6% in the 2nd quarter. Bank of America Corp DE now owns 61,423,013 shares of the semiconductor manufacturer's stock valued at $23,202,543,000 after purchasing an additional 2,685,916 shares during the last quarter. Wellington Management Group LLP boosted its stake in shares of Broadcom by 3.8% in the 2nd quarter. Wellington Management Group LLP now owns 51,580,703 shares of the semiconductor manufacturer's stock valued at $19,484,611,000 after purchasing an additional 1,892,721 shares during the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its position in shares of Broadcom by 2.9% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 40,180,530 shares of the semiconductor manufacturer's stock worth $15,178,195,000 after buying an additional 1,140,598 shares during the period. Hedge funds and other institutional investors own 76.43% of the company's stock.

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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