Selling pressure pushes Broadcom stock lower in today's trading

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Broadcom slips 3.86% today to $378.39

Highlights

Broadcom posted record Q2 revenue of $22.19 billion and net profit of $9.31 billion, but guided cautiously on future AI chip sales.
The company secured new long-term chip supply deals with Alphabet and Meta, while launching an AI infrastructure financing platform with Apollo and Blackstone.
Shares fell sharply and remain under heavy technical selling pressure, with bearish momentum dominating, though a stabilization or rebound between $360.95 and $380.08 is likely in the near term.

Cautious AI outlook and insider buying offset strong Broadcom earnings

Broadcom reported record second quarter revenue of $22.19 billion and net income of $9.31 billion. Shares experienced a sharp pullback as the next quarter’s guidance and investor sentiment regarding AI chip revenues were viewed cautiously. Additional developments included director Harry You acquiring 1,000 shares for nearly $374,000, the launch of the AI XPV Platform in partnership with Apollo and Blackstone to finance AI infrastructure, and new long-term chip supply agreements with Alphabet and Meta. The company recorded strong year-over-year AI revenue growth and maintained positive momentum, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, views Broadcom Inc.'s current situation as technically and fundamentally fragile. He points out that the recent drop below short- and medium-term moving averages signals ongoing selling pressure and loss of momentum. Kharitonov highlights that even with record revenue and institutional buying, the weak guidance and investor caution around AI chip demand have dampened sentiment. Key technical indicators confirm the sellers' grip, and he notes the risk of a breakdown below $360.95 if support fails. "Sustained weakness in price action and oversold readings make a swift recovery unlikely without a major shift in fundamentals," he warns.

Viktoras Karapetjanc, expert at Traders Union, sees substantial long-term opportunity for Broadcom despite recent weakness. He emphasizes the company’s record revenues, impressive AI-related growth, and partnerships with major industry players. Strong institutional confidence, as shown by insider buying and new supply deals, points to robust underlying demand. Karapetjanc believes the bullish structure remains intact above the 200-day moving average and expects further growth from AI infrastructure exposure. "Market volatility offers setups for patient investors—these fundamentals position Broadcom for the next leg up," he asserts.

Jainam Mehta, market strategist, takes a scenario-based view of Broadcom’s short-term prospects. He notes the technical compression between $360.95 and $380.08 and the presence of oversold signals that could attract tactical buyers. Mehta also observes that strong year-over-year AI revenue growth acts as a buffer against further steep losses. "A contrarian trade may work if price stabilizes above $360.95, but breakdown risk is live without a clear reversal trigger," he suggests.

Negative signals and oversold readings as technical momentum slides

Momentum signals are broadly negative: the Moving Average Convergence Divergence (MACD) on the daily chart is in clear sell territory and the Average Directional Index (ADX) shows a weak trend, with the Relative Strength Index (RSI), Stochastic RSI, and Commodity Channel Index (CCI) all pointing to oversold conditions or outright sell signals. Bull/Bear Power (BBP) confirms sellers control intraday momentum with an oversold reading, echoing the persistent downside.

Previously it was reported that Broadcom faced short-term downside pressure despite underlying strength in AI-driven fundamentals and infrastructure partnerships. The current outlook now signals a high probability of near-term stabilization or rebound, with traders advised to monitor $380.08 as a pivotal resistance level for potential upside confirmation.

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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