Broadcom in California, USA. /Courtesy of Reuters·Yonhap News

After Broadcom (AVGO), a U.S. semiconductor corporation, announced its fiscal year second-quarter (April to June 2025) results and saw its stock price drop, most global investment banks (IB) projected an optimistic outlook. However, there were cautious opinions that growth in the artificial intelligence (AI) institutional sector might slow down.

According to the financial investment industry on the 8th, Broadcom shares closed at $246.93 on the Nasdaq market in the U.S. on the 6th (local time), down 5% ($13) from the previous day.

Earlier, Broadcom announced second-quarter revenue of $15 billion and earnings per share (EPS) of $1.58. For its third-quarter (May to July 2025) revenue guidance, it projected $15.8 billion, slightly exceeding market expectations. However, some investors interpreted concerns over a decline in the gross profit margin of the AI institutional sector as a reason to sell.

After the earnings report, IBs generally assessed that the stock price could rise further. According to Hana Securities, Rosenblatt issued a 'buy' rating along with the highest target price of $340, citing steady demand for Broadcom's Ethernet related to AI network construction and strong capabilities in application-specific integrated circuits (ASICs).

In addition, ▲KeyBank $315 ▲Mizuho $310 ▲Evercore $304 ▲Bank of America and Piper Sandler $300 ▲UBS $290 ▲Citi $285 ▲Deutsche Bank and Morgan Stanley $270 also set higher target prices than the current stock price along with expanded weighting or buy opinions.

On the other hand, HSBC stated a 'neutral' opinion, setting a target price of $240. HSBC projected that the networking (Ethernet) ratio in the AI institutional sector would decrease while the ASIC ratio would increase, resulting in a decreased gross profit margin.

Broadcom is emerging as a rival in the AI semiconductor market dominated by Nvidia. Domestic investors also held $1.91584 billion (approximately 2.6 trillion won) worth of Broadcom shares as of the 5th, making it the 13th largest holding among all U.S. stocks.

However, domestic investors have recently begun selling Broadcom shares. According to the Korea Securities Depository, domestic investors sold a net total of $127.24 million (approximately 170 billion won) worth of Broadcom shares over the past month (May 7 to June 6).