Broadcom Inc. (NASDAQ:AVGO) stock rebounded nearly 6% in Friday's premarket trading as investors reassessed AI infrastructure spending prospects following a steep technology selloff.
The rebound followed a more than 10% plunge Thursday, when concerns over data-center construction and the potential impact of the U.S. midterm election results on AI infrastructure expansion rattled investors.
The broader market rout wiped out an estimated $3.2 trillion in market value in a single session. The Nasdaq 100 tumbled 6.4%, while the S&P 500 sank 4.4% as investors questioned the sustainability of the AI spending boom.
Tech Rebound Lifts Broadcom
Broadcom's rebound came as investors returned to technology and semiconductor stocks following Thursday's sharp losses.
Nasdaq futures rose 1.60%, while S&P 500 futures gained 0.20%, signaling improved risk appetite.
However, concerns remain over the pace of AI infrastructure spending and potential restrictions on data-center development.
Broadcom's exposure to custom AI chips, networking equipment and enterprise software makes it sensitive to changes in technology spending.
The company's next earnings report, expected in December, could provide further insight into AI demand.
Analysts currently maintain a Buy consensus rating on Broadcom, with an average price forecast of $523.77.
Technical Analysis
Despite Friday's rebound, Broadcom remains below its major moving averages, signaling continued weakness.
The stock trades 8.2% below its 20-day simple moving average (SMA) of $335.52 and 11.9% below its 50-day SMA of $349.44.
It also remains below its 100-day SMA of $368.07 and 200-day SMA of $367.25.
The moving averages point to a bearish trend. Meanwhile, the moving average convergence divergence (MACD) indicator remains below its signal line, suggesting weak momentum.
Traders are watching resistance near $352.50. A sustained move above that level could strengthen the recovery. Support sits near $307.
Broadcom's 52-week range of $289.96 to $495 highlights the stock's sharp decline from its highs.
AVGO Price Action
Broadcom shares rose 5.74% to $308.25 in Friday's premarket trading, according to market data.
