Broadcom (NASDAQ:AVGO) Shares Down 12.6% – Time to Sell?

Shares of Broadcom Inc. (NASDAQ:AVGO) fell 12.6% on Thursday . The company traded as low as $403.01 and last traded at $418.91. 80,138,932 shares changed hands during trading, an increase of 217% from the average session volume of 25,318,520 shares. The stock had previously closed at $479.23.

Key Broadcom News

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

Wall Street Analysts Forecast Growth

A number of equities research analysts have recently issued reports on the stock. DA Davidson increased their price target on shares of Broadcom from $375.00 to $400.00 and gave the stock a “neutral” rating in a report on Thursday. TD Cowen reaffirmed a “buy” rating and set a $500.00 target price on shares of Broadcom in a report on Thursday. KeyCorp reiterated an “overweight” rating and issued a $575.00 target price (up from $500.00) on shares of Broadcom in a research note on Thursday. The Goldman Sachs Group reissued a “buy” rating and issued a $525.00 price target on shares of Broadcom in a report on Thursday. Finally, Erste Group Bank upgraded shares of Broadcom from a “hold” rating to a “buy” rating in a research report on Friday. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating and three have issued a Hold rating to the company. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average target price of $490.13.

Broadcom Stock Down 7.9%

The stock’s fifty day moving average price is $396.22 and its 200 day moving average price is $361.90. The stock has a market cap of $1.83 trillion, a P/E ratio of 64.29, a price-to-earnings-growth ratio of 0.86 and a beta of 1.41. The company has a current ratio of 2.24, a quick ratio of 1.73 and a debt-to-equity ratio of 0.71.

Broadcom (NASDAQ:AVGO) last posted its quarterly earnings data on Wednesday, June 3rd. The semiconductor manufacturer reported $2.44 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.40 by $0.04. Broadcom had a net margin of 38.85% and a return on equity of 41.61%. The company had revenue of $22.19 billion during the quarter, compared to the consensus estimate of $22.13 billion. During the same period in the previous year, the firm posted $1.58 EPS. The firm’s revenue was up 47.9% compared to the same quarter last year. As a group, research analysts forecast that Broadcom Inc. will post 9.97 earnings per share for the current fiscal year.

Broadcom Announces Dividend

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

Insider Transactions at Broadcom

In other news, CFO Kirsten M. Spears sold 36,292 shares of the stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $321.60, for a total transaction of $11,671,507.20. Following the transaction, the chief financial officer directly owned 327,760 shares in the company, valued at approximately $105,407,616. This represents a 9.97% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider S. Ram Velaga sold 38,841 shares of the firm’s stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $321.60, for a total value of $12,491,265.60. Following the transaction, the insider directly owned 96,147 shares in the company, valued at approximately $30,920,875.20. This represents a 28.77% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 324,282 shares of company stock valued at $106,425,249 over the last quarter. 1.90% of the stock is owned by company insiders.

Institutional Investors Weigh In On Broadcom

A number of hedge funds have recently made changes to their positions in the business. Norges Bank bought a new position in shares of Broadcom during the fourth quarter valued at about $24,252,196,000. Cardano Risk Management B.V. lifted its stake in shares of Broadcom by 895.2% in the 4th quarter. Cardano Risk Management B.V. now owns 12,689,800 shares of the semiconductor manufacturer’s stock valued at $4,391,940,000 after acquiring an additional 11,414,701 shares during the last quarter. Arrowstreet Capital Limited Partnership boosted its holdings in Broadcom by 118.1% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 18,739,006 shares of the semiconductor manufacturer’s stock valued at $5,799,889,000 after acquiring an additional 10,145,377 shares during the period. State Street Corp boosted its holdings in Broadcom by 2.7% during the 4th quarter. State Street Corp now owns 190,084,351 shares of the semiconductor manufacturer’s stock valued at $65,788,194,000 after acquiring an additional 5,040,801 shares during the period. Finally, Vanguard Group Inc. grew its position in Broadcom by 0.8% during the 4th quarter. Vanguard Group Inc. now owns 482,707,302 shares of the semiconductor manufacturer’s stock worth $167,064,997,000 after acquiring an additional 3,919,715 shares during the last quarter. 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.