Broadcom Inc. (AVGO) stock fell more than 4% in Monday's premarket session amid a broader semiconductor selloff. Advanced Micro Devices Inc. (AMD), NVIDIA Corp. (NVDA) and Marvell Technology Inc. (MRVL) also fell between 3% and 8%.

AI Spending Concerns Weigh On Broadcom

The sector weakened as investors reassessed the outlook for AI infrastructure spending amid calls to slow frontier AI development over safety concerns.

The Financial Times reported that a slower pace of AI development could eventually weigh on infrastructure and capital spending.

The debate is particularly relevant for Broadcom because of its exposure to custom AI accelerators and data-center networking. Anthropic CEO Dario Amodei has called for greater coordination among AI companies on frontier development and safety, raising questions about the pace of future AI investment.

Technical Analysis

The weaker market backdrop is putting added pressure on technology stocks with premium valuations. Broadcom is also trading below several key moving averages. That could make nearby technical levels more important if volatility remains elevated.

Broadcom is trading 5.6% below its 20-day simple moving average of $367.49. It is also 9.4% below its 50-day SMA of $383.09 and 6.3% below its 200-day SMA of $370.20.

That setup points to continued technical weakness. However, momentum is showing signs of improvement. The MACD remains above its signal line, while the histogram is positive. That suggests selling pressure may be easing.

The longer-term picture is mixed. The 20-day SMA remains below the 50-day SMA, a bearish near-term signal. However, the 50-day SMA remains above the 200-day SMA following an April golden cross.

Key resistance sits near $376.50. Meanwhile, support is around $342.50. A break below that level could increase near-term selling pressure.

Analyst Outlook

The stock carries a Buy consensus rating with an average price forecast of $518.96.

Piper Sandler initiated coverage with an Overweight rating and $460 price forecast on Sept. 10. Citigroup maintained a Buy rating and raised its forecast to $515 on Sept. 4. DA Davidson maintained a Neutral rating and lowered its forecast to $350 the same day.

Broadcom's Quality Score Shines, But Momentum Lags

MarketDash Edge gives Broadcom a strong Quality score of 95.62. However, its Momentum score stands at 43.32, while Growth is 27.98 and Value is 7.31.

The combination points to strong underlying business quality but weaker valuation and growth scores.

Broadcom also carries significant weight in semiconductor ETFs, including the iShares Semiconductor ETF, iShares Expanded Tech Sector ETF and Invesco PHLX Semiconductor ETF.

AVGO Price Action

Broadcom shares fell 4.43% to $345.96 in Monday's premarket trading, according to market data.