Broadcom (AVGO) shares dropped 7% to a one-month low on Thursday, extending their losing streak amid a broader selloff in semiconductor stocks. The decline follows Nvidia’s (NVDA) underwhelming market reaction to its earnings report and renewed concerns over potential tariffs and AI chip export restrictions from the Trump administration.
Despite reporting earnings that surpassed expectations, Nvidia’s forecast failed to fully satisfy investor hopes amid mounting worries over AI spending growth and trade policy uncertainty—a sentiment that weighed heavily on chipmakers, including Broadcom.
Broadcom’s stock has fallen approximately 15% year-to-date but remains up more than 50% over the past 12 months, driven by surging demand for its AI infrastructure chips. Analysts at Bernstein previously suggested that Broadcom could be having its own “Nvidia moment” as the AI boom reshapes the semiconductor landscape.
Technical Analysis: Broadcom’s Key Price Levels
Broadcom’s price chart reveals that the stock has been trading within a descending channel since hitting an all-time high in mid-December. The stock recently broke below the closely-watched 50-day moving average (MA) on increasing volume, reinforcing a bearish outlook.
The Relative Strength Index (RSI), currently below 40, indicates weakening momentum. However, such readings have historically marked local bottoms for the stock, potentially signaling upcoming stabilization.
Support Levels to Watch
$185: This level, just below the descending channel, coincides with the 200-day MA and the upper boundary of a previous ascending triangle pattern, making it a critical short-term support zone.
$160: If selling pressure intensifies, the stock could fall toward this level, which served as a floor during corrections in June and November 2024.
$140: A steeper decline could test this level, aligning with a horizontal support line from March to September 2024.
Resistance and Upside Targets
Should Broadcom regain bullish momentum, investors should monitor the channel’s upper trendline near $230, which intersects with the 50-day MA.
A decisive breakout could trigger a continuation of the long-term uptrend, with technical projections indicating an upside target around $295—based on the stock’s late-2024 rally.
As investors navigate volatile markets, Broadcom’s price action remains closely tied to broader semiconductor sentiment, AI spending trends, and trade policy developments.
