Broadcom (NASDAQ:AVGO) Shares Gap Down on Analyst Downgrade

Broadcom Inc. (NASDAQ:AVGO) gapped down before the market opened on Thursday after Truist Financial lowered their price target on the stock from $550.00 to $520.00. The stock had previously closed at $367.24, but opened at $351.74. Truist Financial currently has a buy rating on the stock. Broadcom shares last traded at $342.8930, with a volume of 12,627,053 shares changing hands.

A number of other analysts also recently issued reports on the company. Deutsche Bank Aktiengesellschaft restated a “buy” rating and issued a $515.00 price target (up from $430.00) on shares of Broadcom in a research report on Thursday, June 4th. Oppenheimer reaffirmed an “outperform” rating and set a $535.00 price target (up from $450.00) on shares of Broadcom in a research note on Thursday, June 4th. Erste Group Bank reiterated a “hold” rating on shares of Broadcom in a report on Tuesday, July 7th. Evercore set a $578.00 price objective on shares of Broadcom in a research report on Thursday. Finally, Weiss Ratings lowered Broadcom from a “buy (b)” rating to a “buy (b-)” rating in a research report on Thursday, July 30th. Thirty-one research analysts have rated the stock with a Buy rating and four have given a Hold rating to the company’s stock. Based on data from MarketBeat, Broadcom presently has a consensus rating of “Moderate Buy” and a consensus price target of $501.77.

Insider Buying and Selling

In other Broadcom news, insider Mark David Brazeal sold 25,000 shares of Broadcom stock in a transaction dated 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 transaction, the insider owned 194,989 shares in the company, valued at $78,254,935.37. The trade was a 11.36% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Harry L. You acquired 1,000 shares of the business’s stock in a transaction dated Thursday, June 11th. The stock was purchased at an average cost of $373.57 per share, for a total transaction of $373,570.00. Following the transaction, the director owned 38,466 shares in the company, valued at approximately $14,369,743.62. The trade was a 2.67% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Over the last 90 days, insiders have sold 61,644 shares of company stock valued at $24,016,214. 1.90% of the stock is owned by insiders.

Key Headlines Impacting Broadcom

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom reported fiscal third-quarter revenue of approximately $29.6 billion, up 86% year over year, and non-GAAP EPS of $3.32, exceeding the $3.22 consensus estimate. Free cash flow reached $13.7 billion. Broadcom fiscal third-quarter results
• Positive Sentiment: AI semiconductor revenue surged 221% year over year to $16.7 billion, up 54% sequentially. Management also outlined a potential AI semiconductor revenue opportunity of $115 billion in fiscal 2027 and $230 billion in 2028, supported by strong customer demand and bookings. AVGO Q3 earnings call and AI roadmap
• Positive Sentiment: Several firms raised their targets after the report. Cantor Fitzgerald and Rosenblatt lifted targets to $600, BMO to $575, and Macquarie upgraded the shares to Outperform with a $490 target, citing reduced insourcing concerns and strong custom-chip prospects. Analyst target increases
• Neutral Sentiment: Broadcom declared a quarterly dividend of $0.65 per share, payable September 30 to shareholders of record September 21, reinforcing its shareholder-return program. Broadcom dividend announcement
• Negative Sentiment: Fourth-quarter revenue guidance of approximately $34.8 billion came in below estimates near $35.0 billion. Investors viewed the outlook as too conservative relative to AVGO’s premium valuation and elevated AI-growth expectations, making the guidance miss the immediate catalyst for selling. Broadcom quarterly revenue forecast
• Negative Sentiment: Management cited land, power, chip and substrate availability as constraints on data-center deployments. Competition, including Google’s relationship with Marvell, and uncertainty over who will fund increasingly large AI infrastructure projects are also weighing on sentiment. Broadcom CEO on AI supply constraints

Hedge Funds Weigh In On Broadcom

Several hedge funds have recently made changes to their positions in AVGO. ROSS JOHNSON & Associates LLC lifted its holdings in shares of Broadcom by 1,320.0% in the 4th quarter. ROSS JOHNSON & Associates LLC now owns 71 shares of the semiconductor manufacturer’s stock valued at $25,000 after buying an additional 66 shares during the period. SWAN Capital LLC boosted its stake in shares of Broadcom by 261.9% in the fourth quarter. SWAN Capital LLC now owns 76 shares of the semiconductor manufacturer’s stock worth $26,000 after buying an additional 55 shares during the last quarter. Networth Advisors LLC grew its holdings in Broadcom by 546.2% during the first quarter. Networth Advisors LLC now owns 84 shares of the semiconductor manufacturer’s stock worth $26,000 after acquiring an additional 71 shares during the period. Harborfront Financial Group LLC purchased a new position in Broadcom during the second quarter valued at approximately $38,000. Finally, Cherry Tree Wealth Management LLC raised its position in Broadcom by 44.9% during the fourth quarter. Cherry Tree Wealth Management LLC now owns 129 shares of the semiconductor manufacturer’s stock valued at $45,000 after acquiring an additional 40 shares in the last quarter. 76.43% of the stock is owned by institutional investors and hedge funds.

Broadcom Price Performance

The company has a market capitalization of $1.67 trillion, a price-to-earnings ratio of 58.58, a P/E/G ratio of 0.71 and a beta of 1.44. The stock has a fifty day simple moving average of $384.15 and a 200-day simple moving average of $377.14. The company has a debt-to-equity ratio of 0.71, a current ratio of 2.24 and a quick ratio of 2.01.

Broadcom (NASDAQ:AVGO) last announced its earnings results on Wednesday, September 2nd. The semiconductor manufacturer reported $3.32 earnings per share for the quarter, topping the consensus estimate of $3.22 by $0.10. The business had revenue of $29.59 billion during the quarter, compared to the consensus estimate of $29.43 billion. Broadcom had a return on equity of 41.61% and a net margin of 38.85%.The business’s quarterly revenue was up 85.5% on a year-over-year basis. During the same period in the prior year, the company posted $1.69 EPS. On average, equities research analysts anticipate that Broadcom Inc. will post 10.24 EPS for the current 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 $0.65 dividend. The ex-dividend date of this dividend is Monday, September 21st. This represents a $2.60 dividend on an annualized basis and a yield of 0.7%. Broadcom’s dividend payout ratio (DPR) is currently 43.33%.

About Broadcom

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops and supplies semiconductor and infrastructure software solutions for a broad range of markets. The company’s semiconductor business provides components and systems for wired and wireless communications, enterprise and cloud storage, networking and broadband access, serving original equipment manufacturers, cloud service providers, telecommunications carriers and industrial customers worldwide. Broadcom is headquartered in Irvine, California, and operates globally with research, development and sales organizations across North America, Europe and Asia.

On the semiconductor side, Broadcom’s portfolio includes system-on-chip (SoC) and application-specific integrated circuit (ASIC) solutions, radio-frequency and connectivity components, Ethernet switching and PHY devices, storage adapters and controllers, optical transceivers and other networking silicon.