Broadcom Inc. (Broadcom (AVGO)) extended Thursday's sharp selloff in Friday premarket trading after shares plunged 12.59% in the prior session. Investors continued to digest the chipmaker's earnings report, weighing record quarterly results against AI revenue guidance that fell short of elevated Wall Street expectations.

Nasdaq futures are down 1.16% while S&P 500 futures have shed 0.46%.

Although Broadcom delivered strong quarterly results, investors were underwhelmed by its AI outlook. The company maintained its long-term forecast for AI semiconductor revenue above $100 billion by fiscal 2027 rather than raising it, and projected fiscal third-quarter AI revenue that largely matched lofty expectations.

With valuations across the AI trade reflecting aggressive growth assumptions, the absence of a meaningful guidance increase triggered profit-taking.

Rasgon Says AI Guidance Drove The Selloff

Bernstein senior equity analyst Stacy Rasgon told CNBC that Broadcom's post-earnings selloff was driven by AI guidance rather than the quarter itself, which he described as solid.

He noted the company's third-quarter AI semiconductor revenue forecast of $16 billion fell short of investor expectations of roughly $17 billion or more.

Rasgon said AI revenue is likely to remain uneven as Broadcom shifts Anthropic-related sales from full AI racks to higher-margin chips.

Despite the pullback, Rasgon maintained a positive view on Broadcom, citing attractive valuation, strength in its TPU ecosystem and long-term demand for AI compute infrastructure.

Analyst Consensus & Recent Actions

The stock carries a Buy rating with an average price forecast of $513.68. Recent analyst moves include:

• UBS: Buy (Lowers forecast to $485.00) (June 4)
• B of A Securities: Buy (Raises forecast to $530.00) (June 4)
• Mizuho: Outperform (Raises forecast to $530.00) (June 4)

Technical Analysis

From a trend perspective, AVGO is still holding the intermediate uptrend: it's trading 3.6% above its 50-day SMA and more than 13% above its 100-day SMA, which keeps the larger structure bullish. The 50-day SMA remains above the 200-day SMA (a golden cross that occurred in April), a longer-term signal that the primary trend has been pointed higher.

The near-term picture is choppier, though, with the stock 4.4% below its 20-day SMA and also below its 20-day EMA—often a sign that upside momentum has cooled and rallies may need to "rebuild" before pushing higher. That lines up with the idea that the recent swing high in May may be acting as a near-term ceiling until buyers show up with more urgency.

RSI is the cleaner momentum read right now: at 48.25, it's neutral, suggesting the stock isn't stretched to an extreme and is more in a digestion phase than a momentum breakout. In plain English, RSI helps gauge whether buying or selling pressure is getting overheated; a mid-range reading like this often shows a market that's undecided.

Key levels are tight enough to matter into the open, especially with premarket weakness pressing price toward nearby reference points:

• Key Resistance: $429.50 — close to the 20-day SMA/EMA zone where rebounds have recently been fading.
• Key Support: $405.00 — a nearby floor that sits close to the 50-day EMA area, making it a logical "line in the sand" for dip buyers.

Price Action

AVGO Stock Price Activity: Broadcom shares were down 2.27% at $409.38 during premarket trading on Friday, according to market data.