Broadcom Inc. (Broadcom (AVGO)) is staging a comeback Monday morning. After getting hammered on Friday — a 7.92% drop that wiped out weeks of gains — the stock is up more than 3% in premarket trading, riding a broader tech rally as Nasdaq futures climb nearly 2%.

The sell-off wasn't about bad news. It was about good news that wasn't great enough. Broadcom posted strong quarterly results, but management merely reaffirmed its long-term AI semiconductor revenue target of over $100 billion by fiscal 2027, rather than raising it. Wall Street, which has been pricing AI stocks at premium valuations, wanted more. When they didn't get it, profit-taking kicked in.

But here's the thing: the long-term story hasn't changed. Broadcom is still a central player in the AI infrastructure buildout, and the technical picture suggests the dip might be a buying opportunity for patient investors.

The Technicals: Still Bullish, But Watch the 50-Day

Despite Friday's tumble, Broadcom remains in a longer-term uptrend. The stock still trades above its 100-day simple moving average of $363.72 and its 200-day simple moving average of $355.79. That's a solid foundation.

Remember the golden cross that formed in April, when the 50-day moving average crossed above the 200-day? That signal is still intact, supporting the broader bullish trend. But the stock is now testing a key level: the 50-day simple moving average at $398.41. This is where dip buyers will need to step up.

On the flip side, the stock is about 7.1% below its 20-day simple moving average of $429.02, which suggests near-term momentum has weakened. The MACD is below its signal line with a negative histogram — a sign that buying pressure has cooled. Key resistance sits near $429.50 (close to the 20-day average), while major support is around $324.50.

So the short-term picture is messy, but the long-term trend is still your friend.

Analysts Aren't Running for the Exits

Wall Street remains broadly bullish on Broadcom. The stock carries a Buy rating with an average price target of $513.68 — implying about 29% upside from current levels. Recent analyst moves tell the story:

• UBS: Buy (lowered target to $485.00 on June 4)
• Bank of America Securities: Buy (raised target to $530.00 on June 4)
• Mizuho: Outperform (raised target to $530.00 on June 4)

Two out of three analysts actually raised their targets after the earnings report. That's not a vote of no confidence.

The ETF Factor: Why Broadcom Moves Markets

Broadcom's heavy weighting in several popular ETFs means the stock can get swept up in fund flows. Here are the funds with the biggest exposure:

• iShares Expanded Tech Sector ETF (IGM): 9.12% weight
• First Trust NASDAQ Technology Dividend Index Fund (TDIV): 9.51% weight
• Amplify Cybersecurity ETF (HACK): 8.46% weight

Because Broadcom carries such heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock. That can amplify moves in either direction.

The Bottom Line

Broadcom's AI story is still intact, but the stock is in a near-term correction. The 50-day moving average is the key level to watch. If it holds, the dip could be a buying opportunity. If it breaks, expect more volatility. Either way, the analyst consensus says the long-term outlook is bright — and the technical trend supports that view.

As of Monday premarket, Broadcom shares were trading at $398.71, up 3.37%.