Broadcom Inc (NASDAQ: AVGO) remains in focus this morning following reports that an insider offloaded significant amounts of the semiconductor stock on June 1.
According to a recent securities filing, Charlie Kawwas, president of semiconductor solutions at Broadcom, sold $2.5 million worth of AVGO shares last week.
At the time of writing, Broadcom stock is up more than 70% versus its year-to-date low in April.
Should you sell Broadcom stock at current levels?
Investors often read insider sales as negative for a given stock, as they may indicate that executives are not fully confident about the future of their company.
Still, Citi analysts continue to recommend owning AVGO at current levels as its Q2 earnings earlier this month reiterated Broadcom as the leader in global connectivity and artificial intelligence (AI).
According to the Nasdaq-listed firm, its AI revenue grew an exciting 46% on a year-over-year basis in the second quarter.
More importantly, Broadcom expects its artificial intelligence sales to accelerate at an even faster 60% in the third quarter, indicating it remains exceptionally positioned to benefit from sustained AI spending.
Note that AVGO stock has delivered an eye-popping 8x return over the past five years.
Are AVGO shares undervalued in 2025?
Following their meteoric run in recent months, Broadcom shares are not particularly inexpensive to own at current levels.
AVGO is going for about 39 times its estimated earnings for 2025, which is significantly higher compared even to Nvidia that’s trading at 34 times only at the time of writing.
However, what’s also worth mentioning is that the semiconductor stock offers a stable and growing dividend as well.
At the time of writing, Broadcom stock yields 0.94%, making up, at least partially, for the above-stated valuation concerns.
Hock Tan, its chief executive’s recent forecast of serviceable addressable market for custom ASIC chips hitting $90 billion over the next two years inspires confidence in owning Broadcom stock for the long term as well.
The case for owning Broadcom Inc
AVGO shares may be among top AI stocks to own for the second half of 2025 also because it offers exposure to several end markets within the artificial intelligence space.
Broadcom Inc is active in networking, cloud infrastructure, storage, broadband, cybersecurity, and wireless.
Plus, its $69 billion acquisition of VMware has built its name in infrastructure software as well.
In short, the case for sticking to Broadcom stock is a simple one really: the firm’s core business is a cash cow, and with artificial intelligence, growth is set to accelerate only from here on out.
Note that AVGO counts major hyperscalers like Google Cloud and Meta Platforms as customers.
That’s partly why Wall Street currently has a consensus “buy” rating on Broadcom shares.
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