Broadcom shares drop about 4.5% after announcing multi-year chip deal with Apple

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Broadcom slides 4.58% today to $376.09

Highlights

Broadcom extended its custom chip partnership with Apple through 2031, securing long-term revenue visibility from major tech clients.
Institutional investors increased positions in Broadcom despite ongoing broader market selling and global adoption of its software solutions.
Technically, Broadcom experienced short-term selling pressure but is consolidating above key support at $374.78, with a 65% chance of an upward move toward $385.50.

Revenue visibility strong despite selling as tech partnerships and investor inflows continue

Broadcom expanded its multi-year partnership with Apple to develop and supply custom chips, including radio-frequency, Wi-Fi, and Bluetooth components, under an agreement running through 2031. The company maintained ongoing AI infrastructure agreements with major technology firms such as Meta, OpenAI, and Google, contributing to strong projected revenue visibility. Institutional investors such as COUNTRY TRUST BANK reported significant additions to AVGO holdings, and Broadcom’s software solutions were adopted in global banking initiatives, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees persistent short- and medium-term weakness for Broadcom despite the expanded Apple partnership and institutional inflows. He notes the stock’s decline under its key moving averages and highlights mixed momentum signals, with MACD bearish and several oscillators overbought. Kharitonov is wary of the apparent conflict between positive long-term fundamentals and near-term technical fragility. He warns that sustained price action below $382.98 signals sellers retain control. “Any failure to defend $374.78 could trigger accelerated downside — capital preservation remains crucial here,” he says.

Viktoras Karapetjanc, expert at Traders Union, views the long-term partnership with Apple as a major bullish catalyst. He points to resilient AI revenue streams, strong institutional interest, and software adoption in banking as drivers of future growth. Karapetjanc believes the broader uptrend remains intact with the 200-day moving average as a safety net. “With multi-year agreements in place, I expect further upside as confidence and structural demand strengthen Broadcom’s position,” he states.

Jainam Mehta, market strategist, notes the technical backdrop is mixed but highlights a possible tactical opportunity. Mehta sees the current oversold signals and narrow price range as primed for a volatility spike. He suggests a contrarian trade may emerge if price bounces off the $374.78 support. “A breakout above $382.98 on strong volume could catalyze a sharp short-term rally,” he says.

Bearish momentum and overbought signals highlight seller-buyer tension

Broadcom is trading below its 20-day moving average at $382.98 and 50-day average at $404.80, but remains above the 200-day moving average at $363.16. This structure shows short- and medium-term pressure from sellers, while the longer-term trend remains positive due to a bullish alignment of the 50-day and 200-day moving averages. The nearest support is at $374.78 and resistance at $382.98. Momentum signals are mixed: MACD signals strong selling, ADX reads as neutral. The RSI at 51.65 and CCI at 54.49 give mild buy signals, while Stochastic RSI and Bull/Bear Power both indicate overbought conditions, with BBP confirming recent buyer dominance. The price is close to the session low and intraday volatility is 3.02%, showing clear pressure after the open. Multiple overbought oscillator readings stand in contrast to bearish momentum, highlighting ongoing tension between recent buyers and short-term sellers.

Earlier, analysts noted that Broadcom faced heightened regulatory scrutiny and demand headwinds, increasing downside risks despite a constructive long-term technical outlook. The latest developments—marked by a sharp selloff amid expanded partnerships and persistent volatility—highlight an ongoing tug-of-war between institutional accumulation and short-term seller momentum, with the ability to hold above key support at $374.78 acting as a critical near-term gauge for sentiment.

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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