Broadcom stock drops 3.23% as bearish momentum prevails despite strong AI revenue growth

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Broadcom slides 3.23% today

Highlights

Broadcom exceeded quarterly earnings expectations with $2.05 per share and recorded Q1 AI semiconductor revenue growth of 106% year-over-year to $8.4 billion.
The company secured a $970 million, five-year U.S. Defense Information Systems Agency contract and unveiled a strategic partnership with OpenAI for custom AI accelerators.
AVGO trades below major moving averages with strong bearish momentum, deep oversold readings, and a projected short-term range of $294.50 to $301.50 amid low rebound probability.

AI revenue surge and major contracts as stock faces persistent selling

Broadcom reported quarterly earnings of $2.05 per share for the period ended March 4, 2026, surpassing consensus estimates. The company was awarded a five-year, $970 million contract with the U.S. Defense Information Systems Agency and has started volume shipments of its Tomahawk 6 Ethernet switching silicon. Broadcom also entered a multiyear partnership with OpenAI to develop custom AI accelerators and saw Q1 AI semiconductor revenues rise 106% year-over-year to $8.4 billion, with Q2 guidance at $10.7 billion, though price action has remained under broader selling pressure.

Bearish momentum prevails as oversold signals and resistance converge

Momentum signals on the daily chart remain bearish, as the MACD points to a sell signal and the ADX indicates weak trend strength. Both RSI and CCI are nearing oversold conditions, while the Stoch RSI and Bull/Bear Power confirm deep oversold readings, indicating clear seller dominance. The Awesome Oscillator aligns with this momentum, and the price sits under the Ichimoku Kijun level at $330.17, which acts as immediate resistance. High intraday volatility and downside price action after the open further support the negative technical picture.

Further declines favored as sellers control range-bound outlook

For the upcoming week, AVGO is expected to fluctuate within a typical volatility band of $294.50 – $301.50 as sellers maintain control. The probability of a sustained upward move is estimated below 20%, suggesting further declines are more likely. Continued sideways movement near current levels is the baseline scenario. A bullish reversal requires a firm breakout above the $330 resistance, while a breakdown below $294.50 could trigger additional downside if selling intensifies.

Viktoras Karapetjanc, analyst at Traders Union, sees a strong operational backdrop for Broadcom, with recent contracts and surging AI semiconductor revenues providing fundamental support. However, he believes overall sentiment and technical momentum remain negative in the short term, with sellers dominating price action below key moving averages. The analyst notes that institutional confidence from major partnerships could underpin a future rebound if market pressures ease. "While near-term risks persist, I remain optimistic that Broadcom’s structural drivers will eventually lead to a constructive turnaround once broader market conditions stabilize."

Earlier, analysts noted that Broadcom was experiencing persistent bearish technical pressure despite positive developments in its AI chip business and new strategic partnerships. With multiple momentum indicators now deeply oversold and volatility elevated, traders should watch for either a breakdown below $294.50 triggering further losses or a potential reversal if buyers regain control above immediate resistance.

Source of Data: AVGO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.