Broadcom (NASDAQ:AVGO) Stock Price Down 2.6% – Here’s Why

Broadcom Inc. (NASDAQ:AVGO)’s share price dropped 2.6% during trading on Monday . The stock traded as low as $358.71 and last traded at $358.76. Approximately 18,230,826 shares traded hands during trading, a decline of 27% from the average session volume of 25,066,105 shares. The stock had previously closed at $368.45.

Broadcom News Summary

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom’s strong AI exposure remains a key investment attraction. Recent analysis highlights its leading hyperscaler relationships and custom AI-chip business, while its latest quarterly results showed revenue growth of nearly 48% year over year and earnings above analyst expectations. The Big Difference Between Broadcom and Marvell Technology
• Positive Sentiment: Historical precedent offers some reassurance: although Apple previously reduced its use of a key Broadcom chip, Broadcom’s revenue nearly doubled over the following two fiscal years. This suggests customer changes do not necessarily derail the company’s longer-term growth. Broadcom Has Seen Its Biggest Customer Drop a Key Chip Before
• Neutral Sentiment: Broadcom and Marvell are competing for custom AI-chip demand from hyperscalers. Investors are focused on which company can deliver better performance at a lower cost, making upcoming AI guidance particularly important. Broadcom vs. Marvell Technology
• Negative Sentiment: Marvell’s expanded custom-chip agreement with Google has intensified fears that Broadcom could lose share in a strategically important market. The development contributed to a decline of more than 10% in Broadcom shares from recent levels and increased scrutiny of its forthcoming AI outlook. Marvell Takes a Shot at Broadcom’s Throne With Google Deal
• Negative Sentiment: Investors are questioning a reported $60 billion financing structure for future AI-chip deployments, particularly the potential leverage and the larger financial commitments required to support projected AI revenue. Analysts also argue that a $100 billion AI-revenue target may be difficult to achieve. Broadcom’s $60 Billion AI Debt Deal
• Negative Sentiment: Broad semiconductor-sector weakness ahead of NVIDIA’s results has encouraged investors to reduce risk in high-valued chip stocks. Broadcom’s elevated valuation and the decision by Third Point to exit its position add to concerns about near-term sentiment. Semiconductor Stocks Slide Ahead of NVIDIA Earnings

Wall Street Analyst Weigh In

Several equities research analysts have weighed in on AVGO shares. Rosenblatt Securities reiterated a “buy” rating and issued a $500.00 target price on shares of Broadcom in a report on Thursday, June 4th. Erste Group Bank reissued a “hold” rating on shares of Broadcom in a research report on Tuesday, July 7th. Wall Street Zen cut Broadcom from a “strong-buy” rating to a “buy” rating in a research report on Saturday, July 18th. Deutsche Bank Aktiengesellschaft reissued a “buy” rating and issued a $515.00 price objective (up from $430.00) on shares of Broadcom in a research report on Thursday, June 4th. Finally, Weiss Ratings cut Broadcom from a “buy (b)” rating to a “buy (b-)” rating in a research note on Thursday, July 30th. Twenty-nine research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat, Broadcom currently has a consensus rating of “Moderate Buy” and an average target price of $491.97.

Broadcom Price Performance

The stock has a market cap of $1.71 trillion, a price-to-earnings ratio of 59.79, a price-to-earnings-growth ratio of 0.70 and a beta of 1.45. The company has a debt-to-equity ratio of 0.71, a current ratio of 2.24 and a quick ratio of 2.01. The business’s 50-day simple moving average is $388.57 and its two-hundred day simple moving average is $375.10.

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

Broadcom Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Tuesday, June 30th. Investors of record on Monday, June 22nd were given a dividend of $0.65 per share. The ex-dividend date was Monday, June 22nd. This represents a $2.60 annualized dividend and a yield of 0.7%. Broadcom’s dividend payout ratio (DPR) is currently 43.33%.

Insider Buying and Selling at Broadcom

In related news, Director Harry L. You acquired 1,000 shares of the firm’s stock in a transaction that occurred on Thursday, June 11th. The stock was acquired at an average cost of $373.57 per share, for a total transaction of $373,570.00. Following the completion of the acquisition, the director directly owned 38,466 shares of the company’s stock, valued at approximately $14,369,743.62. This trade represents a 2.67% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Mark David Brazeal sold 25,000 shares of the firm’s 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 transaction, the insider directly owned 194,989 shares of the company’s stock, 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 61,644 shares of company stock valued at $24,016,214. 1.90% of the stock is owned by insiders.

Hedge Funds Weigh In On Broadcom

A number of hedge funds have recently made changes to their positions in the stock. Norges Bank bought a new stake in shares of Broadcom in the 4th quarter valued at $24,252,196,000. Legal & General Group Plc acquired a new position in Broadcom in the second quarter valued at $11,998,148,000. Bank of New York Mellon Corp bought a new stake in Broadcom during the second quarter valued at $10,528,191,000. Jupiter Topco LLC bought a new position in shares of Broadcom in the 2nd quarter worth about $7,396,271,000. Finally, Deutsche Bank AG bought a new position in shares of Broadcom in the 2nd quarter worth about $5,661,216,000. 76.43% of the stock is currently owned by institutional investors.

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.