Broadcom shares drop more than 3% after Q4 outlook fails to impress investors

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Broadcom slides 3.14% to $355.88 today

Highlights

Broadcom posted fiscal Q3 2026 revenue of $29.6 billion, up 86% year over year, with AI semiconductor revenue up 221% to $16.7 billion.
The company declared a $0.65 quarterly dividend and set fourth-quarter revenue guidance at approximately $34.8 billion, projecting a 93% annual increase.
Shares of Broadcom trade below key moving averages, exhibit bearish momentum signals, and are expected to range from $340.2 to $360.81 over the next five days.

Investor caution persists despite surging AI revenue and forecast beat

Broadcom reported fiscal Q3 2026 revenue of $29.6 billion, an increase of 86% from the prior year, supported by a 221% year-over-year gain in AI semiconductor revenue to $16.7 billion. A quarterly dividend of $0.65 per share was declared, payable September 30, 2026. The company surpassed consensus revenue and EPS forecasts, and highlighted continued demand in AI accelerators and networking. Fourth-quarter revenue guidance was set at approximately $34.8 billion, a projected 93% rise from the prior year, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees Broadcom's upbeat Q3 performance overshadowed by weak forward guidance and unconvincing price action. He highlights persistent selling pressure with the stock trading below major moving averages and momentum signals turning decisively bearish. Kharitonov notes that revenue growth in AI semiconductors is impressive but market participants regard the fourth-quarter outlook as underwhelming. Technical indicators suggest risk of a further breakdown if $340.2 fails to hold. "Despite headline growth, I see little near-term upside — buyers remain on the sidelines until clear strength emerges above $360.81."

Viktoras Karapetjanc, expert at Traders Union, focuses on Broadcom’s robust 86% year-over-year revenue growth and transformative gains in AI semiconductors. He believes headline pressure masks fundamental strength, especially given the 93% projected revenue rise for next quarter. Karapetjanc remains constructive on Broadcom’s ability to capture long-term AI demand and sees current selling as a tactical market reset. He states, "The bullish structure remains intact — investors should see pullbacks as opportunities for accumulation going into year-end."

Parshwa Turakhiya, analyst, observes that Broadcom faces short-term downside risk as sentiment reacts to cautious guidance and persistent selling. He notes price action clustering near support at $340.2, with oversold signals hinting at potential mean-reversion trades for tactical buyers. Turakhiya highlights volatility as both a risk and an opportunity in the coming sessions. "For nimble traders, I recommend watching for reversals if price bounces off $340.2, but patience is required in this momentum-driven environment."

Bearish momentum intensifies as price breaks key technical supports

Broadcom is currently trading below its 20-day ($384.96), 50-day ($384.52), and 200-day ($369.63) moving averages, indicating ongoing seller pressure across all major timeframes. The nearest resistance sits at $360.81, with support at $340.2, while the broader trend alignment remains bullish. Momentum signals are bearish, as both MACD and ADX suggest a sell or neutral outlook, and the RSI at 42.22 points to prevailing seller dominance. This view is confirmed by the Bull/Bear Power at -1.5 and an oversold reading. Price is near the session low, and intraday volatility stands at 1.30%, pointing to sustained downside pressure after the opening gap.

Earlier, analysts noted that Broadcom shares remained under sustained downside pressure as bearish technical signals and cautious forward guidance outweighed robust earnings and revenue growth. The current analysis reinforces this view, with a prevailing risk of further declines if the price breaks below $340.2 in the coming sessions.

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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