- Broadcom stock price is on an upbeat momentum amid a market-wide appetite for AI stocks, but headwinds might not be far off.
Broadcom stock price trades near 52-week highs, benefiting from the broader AI-driven chip rally. Deeply embedded in the AI semiconductor space, the company continues to safeguard its position in data center infrastructure software and chips, with investor confidence on the rise.
The impressive outlook has seen analysts raise their price targets for its stock. For instance, HSBC raised Broadcom stock price target dramatically from $240 to $400, citing strong momentum in AI semiconductor demand. Meanwhile, Jefferies raised its target to $315 from $300 while maintaining a BUY rating.
As long as the current upbeat sentiment around AI stays in play, Broadcom stock price will likely stay on the ascending trajectory. On the downside, the absence of company-specific fundamentals means that momentum could dissipate in the coming days once the current AI chips cycle comes to an end. An existential risk factor around the stock is its current level near 52-week highs, which will likely invite profit taking.
Also, the current Broadcom stock price highs carries valuation risk, with the P/E ratio just above 100. That puts pressure on the company to not only return profits, but also improve its margins, with little room for error on the management’s side. Broadcom (NASDAQ: AVGO) will release its quarterly earnings results on August 28th, and the intervening period is likely too long for the stock to stay afloat on broader market fundamentals.
Broadcom Stock Price Prediction
The momentum on Broadcom stock price calls for further upside above the pivot mark at $270.50. That will likely see initial resistance established at $286.50. Breaking above that level will signal a stronger momentum that could extend gains to test $280.
Conversely, the momentum will shift to the downside if the price breaks below $270.50. That will likely see primary support come at $266.00. Breaking below that level will invalidate the upside narrative. Also, such momentum could send the action lower and test $261.
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