Broadcom (NASDAQ:AVGO) Trading 4.8% Higher – Should You Buy?

Broadcom Inc. (NASDAQ:AVGO)’s stock price shot up 4.8% during mid-day trading on Wednesday . The company traded as high as $395.09 and last traded at $388.69. 30,720,337 shares traded hands during mid-day trading, an increase of 16% from the average session volume of 26,490,170 shares. The stock had previously closed at $370.78.

Broadcom News Roundup

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Apple’s more than $30 billion multiyear deal with Broadcom extends the partnership through 2031 and should provide a large, stable source of revenue. Reuters article
• Positive Sentiment: The agreement boosts Broadcom’s profile in AI-related custom silicon and U.S.-based manufacturing, which investors may see as a long-term strategic advantage. TechCrunch article
• Positive Sentiment: Several articles framed Broadcom as a beneficiary of renewed investor interest in AI semiconductors after recent sector weakness, implying the stock may have room to recover if chip demand stays strong. Benzinga article
• Neutral Sentiment: Broadcom saw unusually large call-option trading, which signals rising speculation but does not by itself confirm a fundamental change in the business.
• Neutral Sentiment: One analyst downgrade and mixed commentary about recent pullbacks could temper enthusiasm, but the Apple contract news appears to be the main driver today. Yahoo Finance article

Analyst Ratings Changes

A number of research firms have recently commented on AVGO. Citigroup reaffirmed a “buy” rating on shares of Broadcom in a research note on Thursday, June 4th. Bank of America upped their price target on shares of Broadcom from $450.00 to $530.00 and gave the stock a “buy” rating in a research report on Thursday, June 4th. JPMorgan Chase & Co. increased their price target on shares of Broadcom from $500.00 to $580.00 and gave the stock an “overweight” rating in a research note on Thursday, June 4th. Dbs Bank raised shares of Broadcom to a “moderate buy” rating in a research note on Thursday, June 18th. Finally, Wall Street Zen upgraded Broadcom from a “buy” rating to a “strong-buy” rating in a report on Wednesday, July 1st. One equities research analyst has rated the stock with a Strong Buy rating, twenty-eight have given a Buy rating and four have given a Hold rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $493.24.

Broadcom Stock Performance

The stock has a 50 day simple moving average of $405.96 and a 200 day simple moving average of $363.03. The company has a market cap of $1.85 trillion, a price-to-earnings ratio of 64.78, a PEG ratio of 0.66 and a beta of 1.45. The company has a quick ratio of 2.01, a current ratio of 2.24 and a debt-to-equity ratio of 0.71.

Broadcom (NASDAQ:AVGO) last posted 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 business had revenue of $22.19 billion during the quarter, compared to analyst estimates of $22.13 billion. During the same quarter last year, the firm earned $1.58 earnings per share. The company’s revenue for the quarter was up 47.9% compared to the same quarter last year. As a group, analysts predict that Broadcom Inc. will post 10.24 EPS for the current year.

Broadcom Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, June 30th. Shareholders of record on Monday, June 22nd were issued a $0.65 dividend. The ex-dividend date was Monday, June 22nd. This represents a $2.60 dividend on an annualized basis and a yield of 0.7%. Broadcom’s payout ratio is currently 43.33%.

Insider Buying and Selling

In other news, insider Mark David Brazeal sold 4,825 shares of the firm’s stock in a transaction dated Wednesday, June 17th. The stock was sold at an average price of $394.91, for a total transaction of $1,905,440.75. Following the completion of the sale, the insider directly owned 269,989 shares in the company, valued at $106,621,355.99. This trade represents a 1.76% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Gayla J. Delly sold 1,000 shares of the business’s stock in a transaction dated Thursday, April 9th. The stock was sold at an average price of $358.31, for a total value of $358,310.00. Following the completion of the transaction, the director owned 32,352 shares in the company, valued at approximately $11,592,045.12. This trade represents a 3.00% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 36,014 shares of company stock worth $13,174,907 over the last quarter. Company insiders own 1.90% of the company’s stock.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in AVGO. Fullerton Advisors LLC raised its stake in Broadcom by 1.3% during the first quarter. Fullerton Advisors LLC now owns 1,989 shares of the semiconductor manufacturer’s stock valued at $616,000 after buying an additional 25 shares in the last quarter. NORTHSTAR ASSET MANAGEMENT Co raised its position in shares of Broadcom by 0.5% during the 1st quarter. NORTHSTAR ASSET MANAGEMENT Co now owns 5,350 shares of the semiconductor manufacturer’s stock valued at $1,656,000 after acquiring an additional 25 shares in the last quarter. RFG Holdings Inc. lifted its stake in Broadcom by 0.3% during the first quarter. RFG Holdings Inc. now owns 8,499 shares of the semiconductor manufacturer’s stock worth $2,631,000 after purchasing an additional 26 shares during the last quarter. Yukon Wealth Management Inc. lifted its stake in Broadcom by 1.1% during the first quarter. Yukon Wealth Management Inc. now owns 2,501 shares of the semiconductor manufacturer’s stock worth $774,000 after purchasing an additional 26 shares during the last quarter. Finally, NerdWallet Wealth Partners LLC boosted its holdings in Broadcom by 2.6% in the second quarter. NerdWallet Wealth Partners LLC now owns 1,057 shares of the semiconductor manufacturer’s stock worth $399,000 after purchasing an additional 27 shares during the period. 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.