Shares of Irvine-based Broadcom Corp. fell about 5% Friday after shares of the chipmaker got hit with a downgrade, despite topping analysts’ estimates with quarterly results the day before.
Several other investment banks kept “buy” and “overweight” ratings on Broadcom.
But analysts at Caris & Co. of New York downgraded Broadcom Friday from “buy” to “average.”
The chipmaker gross margins have “peaked” and are “liable to decline” amid tight supplies at contract chip plants Broadcom uses to make its chips and higher wafer costs, the analysts said.
Shares of Broadcom were off more than $2 near the close of trading Friday. The stock is up about 46% this year.
Broadcom’s market value is about $23 billion.
Thursday the company said first-quarter adjusted net income nearly tripled to $222 million from a year earlier. Sales were $901 million, up 64% from a year earlier.
Analysts were looking for income of about $210 million on sales of $870 million.
Investors seemed focused on the downgrade early Friday. The company’s stock fell more than $2, putting Broadcom’s market value at just less than $23 billion.
Broadcom’s chips are used in cell phones, digital music players and networking gear, among other devices.
