Broadcom’s Insider Exodus: Record Profits Meet Executive Sell-Off

While Broadcom Inc. continues to post extraordinary financial results, a contrasting narrative is emerging from its boardrooms and major investment firms. The semiconductor and software giant’s leadership and a prominent hedge fund manager have been liquidating their holdings, creating a puzzling divergence between stellar operational performance and insider behavior.

Exceptional Financial Performance

Broadcom’s operational strength was on full display in Q2 of its 2025 fiscal year. The company generated a record $6.4 billion in free cash flow, representing a substantial 44% year-over-year increase. This impressive performance was largely fueled by its artificial intelligence segment, which saw revenue surge 46% to exceed $4.4 billion. The strategic acquisition of VMware continues to contribute significantly to the company’s robust financial metrics.

Demonstrating confidence in its financial position, Broadcom returned $7.0 billion to shareholders through stock repurchases and dividend distributions during the quarter alone. This substantial capital return highlights the company’s powerful cash generation capabilities.

Prominent Investor Exits Position

In a notable move, David Tepper’s Appaloosa Management completely exited its Broadcom position during the second quarter. The prominent hedge fund sold its entire holding of 130,000 shares just months after establishing the position. Market analysts attribute this decision to valuation concerns following the stock’s significant appreciation. Tepper’s exit, particularly his decision to realize gains rather than maintain exposure, has been interpreted by some market participants as a cautionary signal from one of Wall Street’s most respected investors.

Should investors sell immediately? Or is it worth buying Broadcom?

Sustained Insider Selling Activity

More concerning to some observers is the consistent selling pattern among Broadcom’s own executives. Over the past twelve months, company insiders have executed between 35 and 36 separate stock sales without a single recorded purchase. This selling activity includes transactions by CEO Hock Tan and other members of the executive team.

While insider sales can occur for various personal financial reasons, the complete absence of buying activity over an extended period is statistically notable. Such consistent selling patterns often attract market attention and can indicate concerns about future valuation prospects.

Maintaining Analyst Confidence

Despite these selling patterns, equity research firms maintain largely positive outlooks. Goldman Sachs recently reaffirmed its “Buy” recommendation on Broadcom shares. Among the 26 institutions providing coverage, most maintain positive ratings with only a handful recommending neutral “Hold” positions.

Analysts continue to emphasize Broadcom’s positioning in high-growth artificial intelligence and networking markets. The fundamental question for investors remains whether this analytical optimism can outweigh the concerning signals sent by those with the closest view of company operations.