Broadcom weekly report: slips 5% as China restricts VMware use, seller momentum dominates

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Broadcom falls 5.15% this week

Highlights

Broadcom's Q3 revenue rose 28.2% year-on-year to $18.02 billion, with Q1 FY2026 guidance set at $19.1 billion driven by $8.2 billion in AI chip sales and a record $73 billion AI-related backlog.
The introduction of the BCM4918 accelerated processing unit and new Wi-Fi 8 devices advanced AVGO’s product portfolio, while finalization of the VMware acquisition faced a setback as China restricted domestic use of VMware software, impacting nearly half of AVGO’s infrastructure software revenue.
High institutional activity, insider selling, new AVGO option expirations, and persistent AI infrastructure demand shaped market sentiment as AVGO shares closed the week at $332.12, reflecting sector volatility and ongoing headline risks.

AI backlog and new products offset by China VMware restrictions

Broadcom reported robust financial results, with Q3 revenue rising 28.2% year-on-year to $18.02 billion, and issued Q1 FY2026 guidance of $19.1 billion supported by $8.2 billion in AI chip sales and a record $73 billion AI-related backlog. The company advanced product development through the introduction of the BCM4918 accelerated processing unit and two new Wi-Fi 8 devices. Finalization of the VMware acquisition was followed by a directive from China’s Ministry of Industry and Information Technology restricting domestic firms from using VMware software, a move affecting nearly half of AVGO’s infrastructure software revenue. High institutional activity, insider sales, new AVGO option expirations, and continued AI infrastructure demand also shaped the news background.

Sustained selling pressure as oversold signals sharpen during the week

Weekly technicals for AVGO highlight prevailing downside pressure, with the price trading below both the 20-week moving average ($351.29) and the Ichimoku Kijun line ($348.18), reinforcing ongoing selling momentum. Support stands at the 50-week moving average ($283.89), with the lower boundary of the weekly range near $324.21 and resistance layered at $348.18 and $354.47. Weekly oscillators — Stoch RSI, CCI, and BBP — are broadly oversold, while RSI is just below 50, reflecting strong seller control; however, the MACD shows bullish divergence and the ADX points to a firm but non-directional trend underpinning heightened volatility during the week.

Range-bound outlook persists as rebound odds stay limited next week

For the upcoming week, AVGO is expected to trade between $324 and $344. Technical factors suggest the probability of a price rebound remains low, with further downside or sideways action favored unless buyers regain conviction. Should the price rise and sustain above resistance near $348.18, a move toward $344 becomes plausible, while a close below $324 could accelerate losses in the direction of medium-term support around $284. The baseline scenario continues to be consolidation within the defined $324 – $344 corridor.

Viktoras Karapetjanc, analyst at Traders Union, notes that Broadcom delivered another impressive quarter, driven by soaring AI chip sales and a robust AI-related backlog. Despite headline regulatory pressure from China and a 5.15% weekly pullback, he believes the bullish structure is clearly intact with price action still above key long-term moving averages. Macro and institutional confidence remain strong, and demand for AI infrastructure keeps the runway open for further growth. Karapetjanc sees the $324–$344 corridor as a launchpad for renewed momentum if buyers step in. "This week, I expect Broadcom to consolidate but view any stabilization above $324 as a strong opportunity to participate in the next leg up."

Last time, analysts observed that Broadcom was trading below both its short- and medium-term moving averages while maintaining a positive long-term technical posture. The report highlighted mounting downside pressure as technical and intraday signals consistently indicate selling pressure without significant bullish divergence.

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

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