Broadcom (NASDAQ:AVGO) Stock Price Down 3% – Here’s Why

Broadcom Inc. (NASDAQ:AVGO) was down 3% on Thursday . The company traded as low as $406.30 and last traded at $412.56. Approximately 22,220,266 shares were traded during trading, a decline of 12% from the average daily volume of 25,112,336 shares. The stock had previously closed at $425.44.

Broadcom News Summary

Here are the key news stories impacting Broadcom this week:

• Negative Sentiment: Broadcom shares are under pressure after reports said OpenAI’s planned $18 billion custom chip deal with the company hit a financing roadblock, creating uncertainty around a key AI revenue driver. Broadcom shares slump as OpenAI’s $18B custom chip deal hits financing snag
• Negative Sentiment: Another report framed the OpenAI issue as a major setback for Broadcom’s custom AI chip ambitions, adding concern that one of its flagship customer relationships may not be as immediately monetizable as investors hoped. Broadcom’s OpenAI mega AI deal hits $18 billion wall
• Neutral Sentiment: Broadcom also announced VMware by Broadcom VCF 9.1, a product update aimed at accelerating production AI workloads in private clouds, which supports the company’s long-term enterprise AI strategy. Broadcom (AVGO) Launches VCF 9.1 to Accelerate Production AI in Private Clouds
• Neutral Sentiment: Several commentary pieces remained constructive on Broadcom’s position in the AI infrastructure stack, noting that recent hyperscaler results still support demand for chips and networking tied to AI buildouts. Big Tech earnings support Broadcom’s outlook
• Neutral Sentiment: Broadcom was also mentioned in a public-sector VMware partnership update, which could help broaden enterprise distribution but is not likely the main driver of the stock today. evoila U.S. and Carahsoft Partner to Deliver VMware by Broadcom Services to the Public Sector

Analyst Ratings Changes

A number of analysts have weighed in on AVGO shares. Erste Group Bank cut shares of Broadcom from a “buy” rating to a “hold” rating in a research note on Thursday, April 2nd. Bank of America decreased their target price on shares of Broadcom from $500.00 to $450.00 and set a “buy” rating on the stock in a research note on Thursday, March 5th. Weiss Ratings cut shares of Broadcom from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Friday, April 24th. Rosenblatt Securities reaffirmed a “buy” rating and set a $500.00 target price on shares of Broadcom in a research note on Tuesday, April 7th. Finally, DA Davidson raised shares of Broadcom to a “hold” rating in a research note on Friday, February 13th. Two analysts have rated the stock with a Strong Buy rating, twenty-seven have given a Buy rating and four have issued a Hold rating to the stock. According to data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus price target of $435.30.

Broadcom Trading Up 4.2%

The company has a market cap of $2.04 trillion, a price-to-earnings ratio of 83.98, a price-to-earnings-growth ratio of 0.85 and a beta of 1.43. The business’s fifty day moving average price is $352.89 and its 200 day moving average price is $351.28. The company has a debt-to-equity ratio of 0.80, a current ratio of 1.90 and a quick ratio of 1.73.

Broadcom (NASDAQ:AVGO) last released its earnings results on Wednesday, March 4th. The semiconductor manufacturer reported $2.05 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.03 by $0.02. The business had revenue of $19.31 billion for the quarter, compared to analyst estimates of $19.10 billion. Broadcom had a net margin of 36.57% and a return on equity of 38.61%. Broadcom’s revenue for the quarter was up 29.5% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.60 earnings per share. Research analysts anticipate that Broadcom Inc. will post 9.95 earnings per share for the current fiscal year.

Broadcom Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Investors of record on Monday, March 23rd were issued a $0.65 dividend. The ex-dividend date was Monday, March 23rd. This represents a $2.60 annualized dividend and a yield of 0.6%. Broadcom’s payout ratio is presently 50.78%.

Insider Activity

In other news, insider Mark David Brazeal sold 50,488 shares of the stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $321.60, for a total transaction of $16,236,940.80. Following the transaction, the insider owned 278,141 shares of the company’s stock, valued at $89,450,145.60. This represents a 15.36% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Charlie B. Kawwas sold 39,116 shares of the stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $321.61, for a total transaction of $12,580,096.76. Following the transaction, the insider directly owned 74,626 shares in the company, valued at $24,000,467.86. This trade represents a 34.39% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 324,282 shares of company stock worth $106,425,249 in the last three months. Corporate insiders own 1.90% of the company’s stock.

Institutional Investors Weigh In On Broadcom

A number of institutional investors have recently added to or reduced their stakes in AVGO. Brighton Jones LLC grew its position in Broadcom by 21.8% in the 4th quarter. Brighton Jones LLC now owns 29,683 shares of the semiconductor manufacturer’s stock worth $6,882,000 after purchasing an additional 5,322 shares in the last quarter. Revolve Wealth Partners LLC grew its position in shares of Broadcom by 10.4% during the 4th quarter. Revolve Wealth Partners LLC now owns 7,997 shares of the semiconductor manufacturer’s stock valued at $1,854,000 after acquiring an additional 756 shares during the period. United Bank grew its position in shares of Broadcom by 76.5% during the 1st quarter. United Bank now owns 2,339 shares of the semiconductor manufacturer’s stock valued at $392,000 after acquiring an additional 1,014 shares during the period. Sivia Capital Partners LLC grew its position in shares of Broadcom by 10.1% during the 2nd quarter. Sivia Capital Partners LLC now owns 12,693 shares of the semiconductor manufacturer’s stock valued at $3,499,000 after acquiring an additional 1,160 shares during the period. Finally, Capital & Planning LLC grew its position in shares of Broadcom by 10.5% during the 2nd quarter. Capital & Planning LLC now owns 3,983 shares of the semiconductor manufacturer’s stock valued at $1,098,000 after acquiring an additional 378 shares during the period. 76.43% of the stock is owned by 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.