Broadcom (NASDAQ:AVGO) Trading Down 4.7% – What’s Next?

Shares of Broadcom Inc. (NASDAQ:AVGO) were down 4.7% during mid-day trading on Monday . The company traded as low as $391.91 and last traded at $392.13. 25,278,762 shares were traded during trading, a decline of 4% from the average session volume of 26,371,928 shares. The stock had previously closed at $411.35.

Broadcom News Roundup

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom and OpenAI unveiled “Jalapeño,” OpenAI’s first custom AI inference chip, marking a major new partnership and a potential multi-generation revenue opportunity in AI hardware. Article Title
• Positive Sentiment: The new chip is designed for AI inference at scale and early testing suggests better performance per watt than current leading accelerators, which could strengthen Broadcom’s competitive position against Nvidia and other rivals. Article Title
• Positive Sentiment: OpenAI said the chip is part of a broader full-stack AI platform and could be deployed at gigawatt scale, implying potentially large future demand for Broadcom’s networking and accelerator products. Article Title
• Neutral Sentiment: Commentary pieces argue the market may be overreacting to near-term AI guidance and that Broadcom’s long-term AI story remains intact, adding to the debate around the stock’s valuation. Article Title
• Negative Sentiment: Broader semiconductor weakness, including a sharp selloff in Korean chip stocks, is weighing on the entire AI hardware group and limiting the upside from Broadcom’s news flow. Article Title

Wall Street Analysts Forecast Growth

Several equities analysts have recently weighed in on the company. UBS Group set a $485.00 price target on Broadcom and gave the company a “buy” rating in a research report on Thursday, June 4th. Wall Street Zen lowered Broadcom from a “strong-buy” rating to a “buy” rating in a report on Tuesday. Zacks Research cut Broadcom from a “strong-buy” rating to a “hold” rating in a research report on Thursday, May 21st. The Goldman Sachs Group reissued a “buy” rating and issued a $525.00 price target on shares of Broadcom in a report on Thursday, June 4th. Finally, Seaport Research Partners restated a “neutral” rating on shares of Broadcom in a research report on Wednesday, April 8th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-eight have issued a Buy rating and three have given a Hold rating to the company’s stock. According to MarketBeat.com, Broadcom currently has a consensus rating of “Moderate Buy” and an average price target of $493.24.

Broadcom Price Performance

The business has a 50 day simple moving average of $412.34 and a two-hundred day simple moving average of $363.42. The firm has a market capitalization of $1.81 trillion, a P/E ratio of 63.55, a price-to-earnings-growth ratio of 0.69 and a beta of 1.41. The company has a debt-to-equity ratio of 0.71, a quick ratio of 2.01 and a current ratio of 2.24.

Broadcom (NASDAQ:AVGO) last issued its quarterly earnings results on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $2.40 by $0.04. The firm had revenue of $22.19 billion during the quarter, compared to the consensus estimate of $22.13 billion. Broadcom had a return on equity of 41.61% and a net margin of 38.85%.The company’s revenue for the quarter was up 47.9% on a year-over-year basis. During the same quarter last year, the company posted $1.58 EPS. On average, sell-side analysts expect that Broadcom Inc. will post 10.24 EPS for the current fiscal year.

Broadcom Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Tuesday, June 30th. Stockholders of record on Monday, June 22nd will be issued a $0.65 dividend. The ex-dividend date of this dividend is Monday, June 22nd. This represents a $2.60 dividend on an annualized basis and a dividend yield of 0.7%. Broadcom’s dividend payout ratio is presently 43.33%.

Insider Activity

In related news, insider Charlie B. Kawwas sold 10,000 shares of the company’s stock in a transaction on Wednesday, April 8th. The shares were sold at an average price of $345.23, for a total value of $3,452,300.00. Following the completion of the transaction, the insider directly owned 787,184 shares in the company, valued at approximately $271,759,532.32. The trade was a 1.25% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider S. Ram Velaga sold 8,000 shares of the stock in a transaction on Friday, April 10th. The shares were sold at an average price of $370.52, for a total value of $2,964,160.00. Following the completion of the transaction, the insider directly owned 57,932 shares in the company, valued at approximately $21,464,964.64. This represents a 12.13% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 59,385 shares of company stock worth $21,301,057. Corporate insiders own 1.90% of the company’s stock.

Hedge Funds Weigh In On Broadcom

Hedge funds and other institutional investors have recently modified their holdings of the company. 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 worth $25,000 after acquiring an additional 66 shares during the last quarter. Networth Advisors LLC grew its holdings in shares of Broadcom by 546.2% during the 1st quarter. Networth Advisors LLC now owns 84 shares of the semiconductor manufacturer’s stock valued at $26,000 after purchasing an additional 71 shares during the last quarter. SWAN Capital LLC grew its holdings in shares of Broadcom by 261.9% during the 4th quarter. SWAN Capital LLC now owns 76 shares of the semiconductor manufacturer’s stock valued at $26,000 after purchasing an additional 55 shares during the last quarter. Miller Global Investments LLC purchased a new position in Broadcom in the 4th quarter worth $31,000. Finally, Nvest Wealth Strategies Inc. bought a new stake in Broadcom in the fourth quarter worth $33,000. 76.43% of the stock is currently owned by hedge funds and other institutional investors.

Broadcom Company Profile

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.