Broadcom Inc. (Broadcom (AVGO)) shares edged higher in Tuesday's premarket session, adding to a 2.8% rebound on Monday as investors shifted focus from last week's post-earnings selloff to the company's long-term artificial intelligence growth story.

The stock took a hit after Broadcom reported strong fiscal second-quarter results but kept its forecast for more than $100 billion in AI semiconductor revenue by fiscal 2027 unchanged, rather than raising it. Management's third-quarter AI revenue outlook also largely matched Wall Street's already high expectations. That triggered profit-taking across AI stocks, as investors who had bid shares to premium valuations wanted to see stronger signs of accelerating growth.

Analysts See AI Demand Outpacing Supply

Analysts at Futurum Research said Monday that Broadcom's fiscal second-quarter results reinforced the view that AI demand is increasingly driving growth across the company, not just its semiconductor business. They highlighted AI semiconductor bookings of more than $30 billion against $10.8 billion in shipments, indicating demand continues to outpace near-term supply.

Futurum noted that Broadcom's AI networking business remains a key growth driver, though networking revenue is expected to normalize to about 30% of total AI revenue over time. Analysts also pointed to VMware as an important stabilizing asset, benefiting from enterprise server expansion and private cloud deployments. They cautioned that Broadcom's long-term AI opportunity will depend on its ability to convert growing multi-year commitments into delivered systems.

Broadcom Holds Key Technical Level

Broadcom is testing a key support level near its 50-day simple moving average of $400.15. The stock remains comfortably above its 100-day moving average of $364.14 and 200-day moving average of $356.32, suggesting the longer-term uptrend is still intact despite recent weakness.

However, shares are trading about 6.2% below the 20-day moving average of $427.35, indicating momentum has cooled since the stock reached its June peak. The moving average convergence divergence (MACD) remains below its signal line, typically a sign that buying momentum has weakened. From a technical perspective, resistance is near $429.50, while support is around $324.50.

Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $513.68. Recent analyst moves include:

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

Price Action

Broadcom shares were up 0.96% at $400.40 during premarket trading on Tuesday, according to market data.