Broadcom stock extends downward price move as seller pressure remains dominant

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Broadcom drops 3.18% to $345.95 today

Highlights

Broadcom reported an 85.5% year-over-year revenue increase in the fiscal third quarter to $29.59 billion, with strong demand fueling growth.
AI chip revenue reached $16.7 billion, affirming Broadcom's position in AI hardware and its substantial contribution to total revenue.
Shares of Broadcom closed 3.18% lower and trade under key moving averages, with technical indicators showing strong downside momentum and an expected range of $336.72 to $355.18.

AI chip gains bolster revenue as leadership signals funding headwinds

Broadcom reported a significant 85.5% year-over-year increase in fiscal third-quarter revenue to $29.59 billion, confirming strong demand and effective execution on large contracts, according to 247wallst. The company also generated $16.7 billion in AI chip revenue, highlighting its leadership in AI hardware and substantial contributions to its overall growth, as noted by Moneycheck. In parallel, Broadcom launched VMware HyperArmor to enhance enterprise security offerings for VMware Cloud Foundation hypervisors, as reported by Investors Broadcom. CEO Hock Tan remarked that, amid surging infrastructure spending, securing funding has become more challenging than sourcing chips, signaling a potential shift in growth dynamics, according to TradingView.

Resistance at Kijun cap and sell signals underscore bearish momentum

AVGO is trading below its MA-20 at $357.29, MA-50 at $364.84, and MA-200 at $368.3. The Ichimoku Kijun level at $357.37 currently acts as immediate resistance. Momentum indicators present a mixed picture: MACD and ADX both deliver strong sell signals, while RSI rests at 45.13 and Stoch RSI has entered the overbought zone, creating a notable divergence. CCI remains neutral, and Bull/Bear Power points to a minor intraday advantage for buyers, but this is outweighed by persistent negative momentum on MACD and weakness indicated by ADX. AVGO opened with a 1.93 gap down, closed near its daily low, and session volatility was moderate, emphasizing ongoing uncertainty despite minor oscillations.

Downside risk elevated as narrow range signals likely continuation

Over the coming days, AVGO is expected to fluctuate within a band of $336.72 to $355.18, reflecting typical volatility relative to current levels. The probability of a price increase is very low, while the likelihood of further downward movement is high. Barring an unexpected catalyst, the baseline scenario points to a sideways pattern within this projected range. A sustained break above $357.37 could trigger renewed buying interest and test higher resistance, while a move below $336.72 may accelerate further downside momentum.

Anton Kharitonov, expert at Traders Union, sees continued pressure on AVGO despite impressive growth in AI chip revenue and robust fiscal results. He notes that technical momentum remains negative, with price stuck below key moving averages and strong sell signals from MACD and ADX. The analyst stays cautious, watching the $336.72 and $357.37 levels for a directional break. "Until AVGO reclaims $357.37, any upside looks unreliable and the risk of further declines remains elevated."

Earlier, analysts noted that while AI infrastructure spending continues to surge, constraints around capital and physical resources could shape the long-term trajectory for industry leaders like Broadcom. With AVGO now trading below key moving averages and momentum signals skewing negative, traders should monitor $336.72 as a potential inflection point for accelerated downside risk in the near term.

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.