Below key averages keeps Broadcom stock under pressure with a 3.29% loss

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Broadcom slides 3.29% as AI chip launches

Highlights

Broadcom is central to OpenAI's custom AI chip rollout, positioning it as a key supplier for major AI infrastructure.
Broadcom’s AI revenue surged 143% year-over-year to $22.2 billion, reflecting accelerating commercial momentum in the sector.
Shares remain under strong near-term selling pressure, with technicals signaling a high probability of further downside toward $350.86–$388.30.

Robust AI revenue growth as chip partnership drives long-term optimism

OpenAI and Broadcom unveiled Jalapeño, OpenAI’s first custom artificial intelligence accelerator chip, with Broadcom providing silicon implementation, networking, and large-scale manufacturing, according to Insider Monkey. This collaboration positions Broadcom as a key supplier in large-scale AI deployments, which could reinforce its long-term earnings stream and operational scale. Meanwhile, FX Leaders reported that Broadcom’s AI revenue surged 143% year-over-year, with recent results showing $22.2 billion in sales, highlighting the company’s commercial strength in the AI market. These developments underline robust business momentum for Broadcom, though price action has remained under broader selling pressure.

Bearish momentum emerges as oversold conditions meet neutral trend

Technically, AVGO/USD is trading below the MA-20 at $381.3 and the MA-50 at $389.01 on the H1 chart, but remains above the long-term MA-200 at $361.15. The Ichimoku Kijun at $381.71 acts as immediate resistance, with support at $361.15. Momentum signals are bearish, with the Moving Average Convergence Divergence (MACD) on sell and the Average Directional Index (ADX) neutral. Relative Strength Index (RSI) is at 34.43, while Stochastic RSI, Commodity Channel Index (CCI), and Bull/Bear Power all indicate oversold or seller-dominant conditions. The Awesome Oscillator remains neutral, and some divergence is present as oversold oscillators contrast with the neutral trend signals, suggesting potential seller exhaustion near term.

Bearish breakout risk grows as consolidation dominates outlook

In the short term, the expected price range for AVGO/USD is $350.86 to $388.3, reflecting typical volatility around current levels. The probability of a move to the upside is considered very low, while the chance of further downside is very high. Three main scenarios are possible: baseline view is for consolidation within the stated range; a bullish breakout above $381.71 may trigger short covering; a bearish extension below $350.86 would confirm renewed selling pressure and likely drive further losses.

Viktoras Karapetjanc, expert at Traders Union, sees Broadcom as fundamentally well-positioned after its strategic chip launch with OpenAI and standout AI revenue growth. He notes the impressive $22.2 billion in AI sales as a reflection of robust demand, but acknowledges that technical momentum is currently bearish. The analyst believes recent selling leaves the price near critical support, suggesting possible seller exhaustion even as the outlook remains pressured. "With Broadcom’s business momentum outpacing short-term price action, any stabilization above $361.15 could offer a constructive tactical entry for patient investors."

Previously it was reported that Broadcom's entry into custom AI hardware, supported by significant multi-year orders, was offset by weak technical momentum and a heightened risk of downside in the stock. The latest price action and sustained bearish signals reinforce this cautious view, making the risk of a further decline the key scenario to watch if support near $361.15 fails to hold.

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.