Broadcom Inc. (NASDAQ:AVGO) stock rose in Tuesday’s premarket session, extending gains after rebounding 2.8% on Monday as investors reassessed last week’s post-earnings selloff and focused on the company’s long-term artificial intelligence growth prospects.
The stock came under pressure after Broadcom reported strong fiscal second-quarter results but maintained, rather than increased, its forecast for more than $100 billion in AI semiconductor revenue by fiscal 2027. Management’s third-quarter AI revenue outlook was also largely in line with Wall Street’s already elevated expectations.
The unchanged outlook triggered profit-taking across AI-related stocks, as investors who had bid shares to premium valuations looked for stronger signs of accelerating growth.
Analysts See AI Demand Outpacing Supply
Analysts at Futurum Research said on Monday that Broadcom’s fiscal second-quarter results reinforced the view that artificial intelligence demand is increasingly driving growth across the company, not just its semiconductor business.
The firm highlighted AI semiconductor bookings of more than $30 billion against $10.8 billion in shipments, indicating demand continues to outpace near-term supply.
Futurum said Broadcom’s AI networking business remains a key growth driver, although networking revenue is expected to normalize to about 30% of total AI revenue over time.
Analysts also pointed to VMware as an important stabilizing asset, benefiting from enterprise server expansion and private cloud deployments, while noting that Broadcom’s long-term AI opportunity will depend on its ability to convert growing multi-year commitments into delivered systems.
Broadcom Holds Key Technical Level
Broadcom is testing a key support level near its 50-day simple moving average of $400.15. The stock remains comfortably above its 100-day moving average of $364.14 and 200-day moving average of $356.32. That suggests the longer-term uptrend is still intact despite recent weakness.
At the same time, shares are trading about 6.2% below the 20-day moving average of $427.35. This indicates momentum has cooled since the stock reached its June peak.
Other technical indicators also suggest caution in the near term. The moving average convergence divergence, or MACD, remains below its signal line. That is typically viewed as a sign that buying momentum has weakened.
From a technical perspective, resistance is near $429.50, while support is around $324.50.
Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $513.68. Recent analyst moves include:
- UBS: Buy (Lowers forecast to $485.00) (June 4)
- Bank of America Securities: Buy (Raises forecast to $530.00) (June 4)
- Mizuho: Outperform (Raises forecast to $530.00) (June 4)
Price Action
AVGO Stock Price Activity: Broadcom shares were up 0.96% at $400.40 during premarket trading on Tuesday, according to Benzinga Pro data.
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