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The Erste Group recently downgraded shares of chipmaker Broadcom (AVGO) to “Hold” from “Buy.” Opining that AVGO stock is trading at overvalued levels, analyst Hans Engel said that “the potential for further price appreciation currently appears limited.” However, in the same note, Engel dispelled fears about Broadcom's long-term prospects by reiterating that the company's gross margin and operating margin should remain at high levels, with revenue expected to jump 89% from the previous year to $29.4 billion.
After witnessing a drop-off, AVGO stock recovered to end the day marginally lower on July 7. Overall, valued at a market capitalization of about $1.8 trillion, shares of Broadcom are up 17% on a year-to-date (YTD) basis.
