Broadcom (NASDAQ:AVGO) Shares Down 7.9% – What’s Next?

Broadcom Inc. (NASDAQ:AVGO) shares dropped 7.9% on Friday . The stock traded as low as $385.59 and last traded at $385.73. Approximately 50,495,264 shares traded hands during trading, an increase of 98% from the average daily volume of 25,562,018 shares. The stock had previously closed at $418.91.

Broadcom News Summary

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom posted record quarterly revenue, beat earnings estimates, and said AI semiconductor demand remains strong, supporting the long-term growth story. Broadcom Q2 Earnings Surpasses Estimates, Revenues Surge Y/Y
• Positive Sentiment: Several analysts remain bullish and raised price targets after the pullback, arguing the market is overreacting to expectations rather than fundamentals. Goldman Sachs urges investors to buy Broadcom dip with still AI revenue trajectory intact
• Positive Sentiment: Management still expects AI revenue to reach $56 billion in fiscal 2026 and more than $100 billion in fiscal 2027, keeping the longer-term AI thesis intact. AVGO Shares Drop 13% Post Q2 Results: Buy, Sell or Hold on the Dip?
• Neutral Sentiment: Broadcom also declared a quarterly dividend, which is supportive for income investors but not a major near-term stock driver.
• Negative Sentiment: The stock is under pressure because the AI outlook, while strong, was not upgraded enough to satisfy investors who had priced in an even bigger upside surprise. Broadcom’s sales and AI chip forecast comes in below expectations, shares tumble
• Negative Sentiment: The disappointment has spilled over into the semiconductor sector, pressuring peers such as AMD, Intel, Micron, and Marvell as investors reassess AI trade valuations. Intel, AMD stocks slide again in aftermath of Broadcom’s weak outlook

Analyst Upgrades and Downgrades

AVGO has been the subject of several research reports. Benchmark raised their price target on shares of Broadcom from $485.00 to $545.00 and gave the stock a “buy” rating in a research note on Thursday. Susquehanna reaffirmed a “positive” rating and set a $490.00 price target (up from $450.00) on shares of Broadcom in a research note on Thursday, May 28th. Zacks Research cut shares of Broadcom from a “strong-buy” rating to a “hold” rating in a research note on Thursday, May 21st. Cantor Fitzgerald reaffirmed an “overweight” rating and set a $525.00 price target on shares of Broadcom in a research note on Thursday. Finally, UBS Group set a $485.00 price target on shares of Broadcom and gave the stock a “buy” rating in a research note on Thursday. One analyst has rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $490.13.

Broadcom Stock Down 7.9%

The company has a quick ratio of 1.73, a current ratio of 2.24 and a debt-to-equity ratio of 0.71. The stock has a fifty day moving average price of $396.22 and a two-hundred day moving average price of $361.90. The company has a market cap of $1.83 trillion, a price-to-earnings ratio of 64.29, a P/E/G ratio of 0.79 and a beta of 1.41.

Broadcom (NASDAQ:AVGO) last released its 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. Broadcom had a return on equity of 41.61% and a net margin of 38.85%.The firm had revenue of $22.19 billion for the quarter, compared to analysts’ expectations of $22.13 billion. During the same quarter in the previous year, the business posted $1.58 earnings per share. The business’s revenue for the quarter was up 47.9% on a year-over-year basis. As a group, sell-side analysts expect that Broadcom Inc. will post 9.97 EPS for the current year.

Broadcom Announces Dividend

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

Insiders Place Their Bets

In related news, insider Charlie B. Kawwas sold 10,000 shares of the company’s stock in a transaction that occurred on Wednesday, April 8th. The stock was sold at an average price of $345.23, for a total value of $3,452,300.00. Following the sale, the insider directly owned 787,184 shares in the company, valued at $271,759,532.32. This represents a 1.25% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, insider Mark David Brazeal sold 50,488 shares of the company’s stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $321.60, for a total value of $16,236,940.80. Following the completion of the sale, the insider owned 278,141 shares in the company, valued at $89,450,145.60. The trade was a 15.36% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 324,282 shares of company stock valued at $106,425,249 over the last three months. Insiders own 1.90% of the company’s stock.

Institutional Trading of Broadcom

Several institutional investors have recently added to or reduced their stakes in the stock. ROSS JOHNSON & Associates LLC boosted its holdings in shares of Broadcom by 1,320.0% during the 4th quarter. ROSS JOHNSON & Associates LLC now owns 71 shares of the semiconductor manufacturer’s stock worth $25,000 after buying an additional 66 shares in the last quarter. Networth Advisors LLC boosted 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 worth $26,000 after buying an additional 71 shares in the last quarter. SWAN Capital LLC boosted 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 worth $26,000 after buying an additional 55 shares in the last quarter. Miller Global Investments LLC bought a new position in shares of Broadcom during the 4th quarter worth approximately $31,000. Finally, Nvest Wealth Strategies Inc. bought a new position in shares of Broadcom during the 4th quarter worth approximately $33,000. 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.