Insiders are Selling These 10 AI Stocks

4. Broadcom Inc (NASDAQ:AVGO)

Number of Hedge Fund Investors: 130

On September 24, 2024, Broadcom Inc (NASDAQ:AVGO) President and CEO Hock E. Tan sold 150,000 shares at $172.94 per share, reducing his ownership by 10% to 1,289,440 shares. The sale was valued at approximately $25.94 million. The stock is down 3.3% since this transaction.

On September 19, 2024, Broadcom Inc (NASDAQ:AVGO) President of the Semiconductor Solutions Group Charlie B. Kawwas sold 25,200 shares at $168.27 per share, reducing his ownership by 3% to 838,470 shares. The transaction was valued at approximately $4.24 million.

In its last reported results, Broadcom Inc (NASDAQ:AVGO) beat estimates on both EPS and revenue, but guidance failed to impress the Street, resulting in a share price decline. However, Jefferies said the dip was a buying opportunity.

“Guidance came in a bit lighter than expected, but management has been messaging lumpiness in AI revenue and growth is set to reaccelerate in 4Q,” said Jefferies analyst Blayne Curtis, in a note. “The cyclical correction in non-AI revenue is in-line with peers, and our view is the long-term trend in AI still favors an industry shift to custom ASICs, where Broadcom Inc (NASDAQ:AVGO) remains well-positioned. Factor in the added benefit of the VMware acquisition running ahead of schedule on both revenue and earnings, and it’s easy to look past one minor bump in the road.”

Broadcom Inc (NASDAQ:AVGO) continues to be a leader in the AI ASCI and networking chips market. The company expects about $12 billion in AI revenue in fiscal 2024, which means 20% of its total revenue will come from AI and counting.

Broadcom Inc (NASDAQ:AVGO) has 3nm AI ASIC chip deals with Alphabet and Meta in addition to many other tech giants aiming massive spending for AI hyperscaling.

The company’s Ethernet business is also strong amid partnerships with Arista Networks (ANET), while the company is also collaborating with Dell (DELL), Juniper (JNPR), and Super Micro (SMCI) in the networking business and other segments.

Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q2 2024 investor letter:

Broadcom Inc. (NASDAQ:AVGO) also performed well during the quarter, as the company reported better-than-expected earnings, with upside from demand related to AI. This long-term holding is strongly positioned to benefit from continued AI demand, with AI sales in the quarter up 400% over the prior year. Overall, AI-related revenue accounted for 30% of total revenue in 2024 and is on pace to represent a majority of the company’s revenue within two to three years.