Broadcom sell-off shows signs of easing after earnings
Broadcom’s post-earnings decline may be losing momentum, with buying volume improving even as the shares remain below key moving averages and momentum indicators stay negative.
Broadcom Inc ‘s (NASDAQ: AVGO ) post-earnings sell-off may have revealed something more interesting than investor disappointment.
While Wall Street focused on ambitious AI forecasts, data center power constraints, and softer-than-expected guidance, the stock’s technical setup suggests the selling pressure could already be losing momentum—even if the broader trend has yet to turn.
AI Demand vs.
Deployment Broadcom shares came under pressure after the company reported third-quarter results and issued fourth-quarter revenue guidance that fell short of lofty expectations.
The sell-off accelerated after CEO Hock Tan outlined a bold vision for AI, saying the company’s AI revenue opportunity could reach $230 billion by fiscal 2028, up from roughly $20 billion in fiscal 2025.
Yet management also acknowledged the market’s biggest concern.
On the earnings call, Tan said whether shipped chips are “deployed on a timely basis” remains “very much in our mind” when providing long-term forecasts, a nod to growing worries that power shortages could delay AI infrastructure deployments.
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Management did not signal weakening customer demand.
Instead, it flagged the possibility that some AI systems may take longer to come online because data center power capacity is struggling to keep pace with the industry’s rapid expansion.
Broadcom Stock Chart Offers an Early Clue The fundamental debate has weighed on the stock, but the technical picture is becoming more nuanced.
Chart created using Pro Broadcom is trading below both its 50-day and 200-day moving averages, leaving the broader trend under pressure.
Momentum indicators such as the MACD also remain negative, suggesting the stock has yet to establish a clear bottom.
Even so, one signal stands out.
The latest sessions have seen buying volume improve despite the decline, suggesting investors were willing to accumulate shares as prices fell.
At the same time, the Relative Strength Index (RSI) has slipped to around 37, approaching levels that often indicate selling pressure is becoming stretched.
None of these signals confirms a reversal.
But together, they point to fading downside momentum rather than accelerating weakness.
What Investors Should Watch Broadcom’s pullback is ultimately a test of expectations rather than business fundamentals.
The company continues to benefit from robust AI demand, but investors are reassessing how quickly that demand can translate into deployed infrastructure and revenue.
For investors, the next signal to watch may come less from another earnings headline than from the stock itself.
If buying volume continues to strengthen and Broadcom begins reclaiming key moving averages, it would suggest the market is looking past near-term deployment concerns and refocusing on the company’s long-term AI opportunity.
Until then, the chart offers an early clue—not confirmation—that the post-earnings sell-off may be running out of steam.
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