Broadcom (AVGO 4.11%) stock is losing ground in Tuesday's trading. The tech company's share price was down 1.6% as of ET, according to data from S&P Global Market Intelligence.
NASDAQ: AVGO
Key Data Points
Broadcom is falling today following a recent filing with Securities and Exchange Commission (SEC). Per the filing published yesterday, CEO Hock Tan sold shares of the company's stock on July 11. Some investors appear to be taking Tan's recent sell move as a sign that it's time to take profits on the stock.
Is Broadcom's CEO giving up on the stock?
Thanks to excitement about the company's artificial intelligence (AI) opportunities, Broadcom stock has surged roughly 50% year to date. On the heels of such strong gains, it's not surprising that some investors are feeling a bit jumpy and looking for any potential indications that the stock may have already reached a near-term valuation peak. While there isn't any major business-specific news spurring today's sell-off, a recent insider selling event is causing some shareholders to follow suit.
Tan sold 7,502 shares of company stock on July 11 at a price of roughly $1,706 per share. The total stock sale was valued at roughly $12.8 million. But even after unloading some shares, Tan still held nearly 138,200 shares of his company's stock. In other words, the sale actually looks relatively small in the context of his overall holdings -- and there's no real sign that the CEO has turned bearish on Broadcom's valuation prospects.
What comes next for Broadcom?
On the heels of Broadcom's recent 10-for-1 stock split, TD Cowen published new coverage on the stock. The firm maintained a buy rating and set a one-year price target on the stock of $210 per share. With the semiconductor company currently trading at roughly $168.50 per share, that would suggest upside of roughly 25%.
Cowen's analysts continue to think that Broadcom is a good way to play big tech trends in artificial intelligence, hyperscale computing, telecommunications, and enterprise expansion. The firm believes that the company's unique combination of semiconductor technology and software strengths make it a smart buy even after big gains this year.
