shares are down 5% this month, trimming last month’s double-digit rally. The semiconductor and infrastructure software company’s stock fell from about $403 on the last market day in November to trade at about $381 on Wednesday morning.
The $1.8 trillion technology company has grown rapidly over the years, both organically and through acquisitions, with its most recent mega addition to the business being the $61 billion acquisition of VMware in 2023.
As one of the leading chip manufacturers, Broadcom stands to benefit from the rapid adoption of artificial intelligence technologies.
Revenue from the company’s AI semiconductors segment grew 63% in the third quarter of fiscal 2025 to reach $5.2 billion, according to the earnings statement released at the start of September. That announcement sparked a significant price gap in the company’s share price.
Broadcom Stock Technical Analysis
From a technical perspective, Broadcom shares trade within an ascending wedge formation, which indicates short-term volatility will likely continue at least until the company releases its fiscal fourth quarter and full-year 2025 financial results on December 11.
However, the AVGO stock price has recently bounced off a key support zone with two support trendlines, S1 and S2, intersecting at $327 on November 17, while the 100-day moving average line sits slightly below them.
Therefore, even in the event of a continued pullback, S1 and S2 will likely continue to hold, providing a base for the next rebound at about $350. S2 has not been breached since May, while S1 has been holding strong since April.
If the pullback continues, with the stock potentially bouncing back at $350, the trendline resistance, R1, which stretches back to 2024, could become a realistic profit-taking zone at $433, while $477 is a more long-term target, especially if the overall bullish sentiment continues after earnings.
The Case for Continued Bullish Sentiment
After achieving a 22% revenue growth to $15.95 billion in its fiscal third quarter results, Broadcom, which based its fiscal fourth quarter revenue projections on the current growth trends, said it expects a top line of $17.4 billion in Q4, about 25% sequential growth from Q3.
AI was a major player in the company’s strong revenue performance in Q3, contributing $5.2 billion to the revenue mix, after a 63% year-on-year growth. Broadcom expects AI to play a similar role in the upcoming quarterly results.
“Q3 AI revenue growth accelerated to 63% year-over-year to $5.2 billion,” said Hock Tan, President and CEO of Broadcom Inc. “We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4, delivering eleven consecutive quarters of growth, as our customers continue to strongly invest.”
Broadcom also expects a steady EBITDA of 67% of reported revenue, unchanged from the third quarter, which equates to about $11.658 billion.
Notably, the company’s guidance is significantly higher than the consensus estimate of $17.02 billion. In the previous quarter, Broadcom outperformed its guidance and the consensus revenue estimate of $15.8 billion, reporting $15.952 billion.
The company will have to significantly outperform the current average analyst forecast to beat its own guidance of $17.4 billion. This could further drive the stock price higher, based on what happened after beating Q3 estimates.
Partnerships and New Products to Fuel Long-Term Growth
Since announcing its fiscal third quarter results, Broadcom has extended its relationship with some of its key partners, including its partnership with Lloyd Banking Group and NEC Global.
In October, the company also announced a strategic collaboration with OpenAI to deploy 10 gigawatts of OpenAI-designed AI accelerators. The company said the multi-year partnership enables OpenAI and Broadcom to deliver accelerator and network systems for next-generation AI clusters.
To further strategically position itself for the AI boom, Broadcom has introduced Wi-Fi 8 solutions, which it says are tailor-made to meet the demands of AI, including performance, reliability, intelligence, and efficiency.
Conclusion
In summary, Broadcom has been one of the best technology stocks of 2025, rallying nearly 65%. For that reason, its price-earnings ratio of about 97 versus Nvidia’s (NVDA) 44.94 may appear prohibitive to bargain hunters.
However, when you factor in the exciting prospects of AI, the AI-related growth the company is already reporting, and global prospects of the industry, Broadcom’s premium valuation begins to look more like it is deserved.
But the short-term technical pressure can not be ignored, even heading into the announcement of its fiscal fourth quarter and full year 2025 results. Therefore, Broadcom looks exciting for those who are in for the long ride.
