Broadcom Inc. (NASDAQ:AVGO) stock rose nearly 2% Thursday as chip and mega-cap technology stocks gained amid a broader market rally. The Nasdaq rose 1.07%, while the S&P 500 gained 0.71%.
Broadcom’s longer-term uptrend may also be supporting the shares as investors favor large-cap semiconductor stocks during the market rally.
Technical Analysis
Broadcom shares are trading above their major moving averages. The stock is about 5.9% above its 20-day simple moving average of $398.61 and 14.4% above its 200-day average of $369.07.
The 20-day moving average remains above the 50-day average. Broadcom also formed a golden cross in April, when its 50-day moving average moved above its 200-day average. Both signals point to a bullish longer-term trend.
Momentum also remains positive. The moving average convergence divergence, or MACD, is above its signal line, while the histogram is positive. That suggests buying momentum is improving.
Resistance sits near $429.50, an area where the recent advance could face selling pressure. Support is near $370, close to the stock’s 200-day moving average.
Earnings And Analyst Outlook
Broadcom is scheduled to report earnings Sept. 2.
Analysts expect earnings of $3.16 per share, compared with $1.69 a year earlier. Revenue is projected at $29.44 billion, up from $15.95 billion in the year-ago period.
Broadcom trades at a price-to-earnings ratio of about 69.2, reflecting a premium valuation.
The stock has a consensus Buy rating and an average price forecast of $513.68.
Recent analyst actions include an Erste Group downgrade to Hold on July 7. UBS maintained a Buy rating but lowered its price forecast to $485 on June 4. Bank of America Securities maintained a Buy rating and raised its price forecast to $530 on June 4.
Benzinga Edge Rankings
Benzinga Edge rankings highlight Broadcom’s strong momentum and quality scores, but also point to weaker value and growth readings.
- Momentum: 76.91
- Quality: 95.71
- Value: 5.93
- Growth: 29.96
The scores point to a stock supported by momentum and business quality but carrying a premium valuation. Broadcom’s technical trend remains positive, while its weak value score highlights the risk if growth slows.
Top ETF Exposure
Broadcom has significant weightings in several technology and semiconductor exchange-traded funds.
- iShares Expanded Tech Sector ETF (NYSE:IGM): 7.71%
- Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ): 7.88%
- Pacer Data and Digital Revolution ETF (NYSE:TRFK): 7.75%
Broadcom’s large weighting means substantial inflows or outflows from these ETFs can contribute to buying or selling pressure in the shares.
AVGO Price Action
AVGO Price Action: Broadcom shares were up 2.08% at $424.71 at the time of publication on Thursday, according to Benzinga Pro data.
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