Broadcom (AVGO) Shares Reach New Highs Ahead of Earnings Report
Broadcom (AVGO) climbed to a record level ahead of its quarterly results, due this Thursday, driven by strong fundamental catalysts:
→ Collaboration with Microsoft: Reports indicate Broadcom is negotiating with Microsoft to create custom AI chips.
→ Positive analyst outlook: UBS has designated Broadcom as a “top pick” in the AI sector, highlighting surging demand for hardware, and raised its target price to $472.
→ Strategic focus on proprietary chips: Investors speculate that Broadcom is shifting attention to its own chip production to capture market share from Nvidia in the AI hardware space.
Additional bullish factors were discussed in our 14 October analysis.
AVGO Technical Analysis
later than a bullish gap emerged on 4 September, the stock has formed an upward-sloping channel (highlighted in blue).
Bullish signals:
→ the channel’s median line is providing support (marked by the arrow);
→ the wide bullish candle on 24 November reflects strong purchaseing interest;
→ the stock has been outperforming broader market indices.
Bearish signals:
→ the share is now approaching the top of the channel;
→ the $400 psychological level shows ahead resistance;
→ at peak B, the price barely exceeded the previous peak A before retracting, hinting at a possible bull trap.
In the short term, AVGO may consolidate near the channel’s upper boundary. The upcoming earnings release could trigger heightened volatility and a significant gap, given the market’s high expectations.
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