Will Broadcom Continue to Surge on AI Boom Despite Technical Resistance?

Broadcom Inc. (AVGO) has delivered strong growth in recent years, driven by booming AI semiconductor demand and expanding infrastructure software revenue. The stock has maintained a long-term uptrend, hitting new record highs and showing resilience after market pullbacks. This article discusses the fundamental and technical analysis of the stock to understand the next move in Broadcom’s share price. The study finds that the stock remains in a parabolic surge, and any correction within this surge should be viewed as a buying opportunity.

Broadcom Stock Surges to New Highs in Parabolic Trend

Broadcoam has been consistently showing positive traction in recent market development. The stock price for Broadcoan has risen sharply for the past few years. The long-term trends for Broadcom indicate that the stock is in a strong parabolic surge mode. It continues to rally and produce new record highs. The yearly chart below shows that the stock has not posted any negative yearly performance except in 2018 and 2022.

In 2018, the decline was only 1.02%, while 2022 saw a larger drop of 15.97%. However, the yearly candle for 2022 formed an inside bar pattern. This inside bar highlighted price compression. A breakout above $67 in 2023, above this inside bar, triggered a strong upward move in Broadcom’s stock.

Following the breakout, the stock gained $55.71 in 2023, $120.22 in 2024, and so far has added $61 in 2025. However, there are still five months to go, and the fundamentals still support the growth of Broadcom.

This strong surge in 2023 and 2024 was due to strong growth in AI semiconductor demand and expanding infrastructure software revenue. AI sales jumped as hyperscalers invested heavily in XPUs and connectivity solutions for data centres. The VMware acquisition boosted software income and improved recurring revenue streams. Robust margins and record free cash flow attracted institutional buying. Investors responded to consistent earnings beats and aggressive capital returns, driving the stock to new highs in both years.

The price action suggests that investors may continue buying Broadcom on any major dips. The significant pullback in 2025, driven by Trump’s tariffs, proved to be a strong buying opportunity for long-term investors.

Since that dip, Broadcom’s stock has resumed its upward momentum, reinforcing the trend of strong performance supported by fundamental growth and market demand.

Broadcom Nears Key Resistance — Will the Rally Continue?

A strong parabolic surge in Broadcom is also evident on the monthly chart. The price structure has formed an ascending broadening wedge pattern from the 2022 bottom to recent highs. This pattern highlights significant price volatility.

The rally followed a sharp correction during Trump’s trade war, when prices fell from a high of $251.88 in December 2024 to a low of $138.10 in April 2025. The April low formed a bottom, producing a bullish hammer candle that initiated a strong surge in Broadcom’s price.

Currently, the price is approaching the resistance zone of the ascending broadening wedge pattern near the $300 level. However, historical price action shows that Broadcom ignores resistance during parabolic phases, continuing to push higher.

The ongoing momentum suggests that the uptrend could persist despite nearing resistance. Robust fundamentals and investor demand support Broadcom’s current market strength.

Any correction toward the $250 or $150 regions should be viewed as a strong buying opportunity for long-term investors, given the stock’s history of sharp recoveries after major pullbacks.

Broadcom’s Technical Setup Points to High-Impact Move

The weekly chart below shows an ascending broadening wedge pattern, with the price approaching resistance in the $300 to $320 region. Multiple ascending patterns across various timeframes indicate that Broadcom is experiencing strong volatility, which could lead to wider price swings over time.

If the price breaks above the $320 level, it could accelerate much higher. However, the likelihood of a short-term top formation will also increase. The chart suggests that if the stock corrects from the wedge resistance, the $250 and $150 regions will serve as key support levels for Broadcom.

Additionally, the 50-day SMA is positioned above the 200-day SMA, reinforcing the long-term bullish trend. These moving averages may also act as strong dynamic support levels during pullbacks.

The RSI is currently in a highly overbought zone, but historically, Broadcom has often ignored overbought readings and continued to rally. This reflects the strength of its ongoing momentum.

A short-term surge in Broadcom’s price could be followed by a temporary drop, allowing the stock to correct toward support zones. This move would likely attract new buyers and set the stage for the next rally.

Broadcom’s Q2 2025 Results Show Explosive Growth

Broadcom generated total net revenue of $15 billion in Q2 2025, up 20% from $12.487 billion in Q2 2024. Semiconductor solutions contributed $8.408 billion, representing 56% of total revenue and marking a 17% year-over-year increase. Infrastructure software accounted for $6.596 billion, or 44% of total revenue, with a stronger 25% growth rate compared to last year.

This balanced revenue mix shows Broadcom’s strategic strength in hardware and software segments. Faster growth in infrastructure software helps diversify earnings beyond the cyclical semiconductor market.

Moreover, the profitability of the company remained exceptional. The adjusted EBITDA was $10.083 billion, or a 68% margin. That margin signals pricing power and an accretive software mix. The chart below shows strong growth in the net income over the past three quarters. The net income for Q2 2025 was $4.96 billion.

On the other hand, earnings per share were also strong, with diluted EPS at $1.03. Cash generation remained robust as well. The chart below shows the operating cash flow of $6.555 billion and the free cash flow of $6.411 billion. This level of cash generation reflects strong growth in 2025 and highlights the efficiency of the company’s operations.

The quarterly dividend was $0.59 per share. The chart below shows a consistent increase in the dividend, highlighting the company’s strong financial health, stable cash flows, and commitment to returning value to shareholders. Broadcom guides Q3 2025 revenue to about $15.8 billion and targets adjusted EBITDA of at least 66% of sales.

Broadcom’s AI Networking Arsenal Challenges Nvidia’s Dominance

Broadcom competes by selling the plumbing for AI scale. It designs Ethernet switches that link hundreds or thousands of accelerators at low latency and high bandwidth. This targets Nvidia Corp (NVDA)’s proprietary NVLink networks with open, faster Ethernet fabrics. The strategy gives cloud providers flexibility and lowers vendor lock-in.

The new Tomahawk Ultra is a key weapon. It acts like a traffic controller for chips packed within a rack and can tie together roughly four times more chips than Nvidia’s NVLink Switch. It also runs a boosted version of Ethernet instead of a closed protocol and is already shipping on Taiwan Semiconductor Manufacturing Company Ltd. (TSM)’s advanced nodes. These features help hyperscalers build bigger “scale-up” AI clusters at lower cost.

Broadcom also pushes “scale-out” with Jericho4. This router-class switch connects data centres up to ~60 miles apart, adds on-chip HBM to buffer congestion, and encrypts traffic beyond the data-centre wall. A single system can encompass ~4,500 chips, enabling massive AI fabrics that span sites. Jericho4, built at TSMC 3 nm, has been launched.

These products create near-term catalysts. Cloud leaders like Google already use Broadcom to help produce custom AI chips, offering a credible alternative path to Nvidia GPUs. As hyperscalers diversify suppliers and pursue Ethernet-based scale, Broadcom’s AI networking and custom-silicon wins should support growth through 2025.

Risk Factors for Broadcom’s Growth Outlook

Broadcom’s growth depends heavily on demand for AI and the spending plans of big cloud companies. These hyperscalers make up a large part of its revenue. If they slow AI investments or shift budgets, sales could take a hit. Moreover, the competition with Nvidia, Advanced Micro Devices (AMD), and Marvell Technology (MRVL) is intense. If customers opt for closed, proprietary networks over Broadcom’s high-performance Ethernet, the company risks losing a key competitive advantage.

Moreover, Broadcom has a group of big customers, which means losing one key contract or delaying a major product could stall growth. Broadcom is still working on integrating VMware, and any trouble keeping customers or achieving cost savings could hurt profits. The company also relies on TSMC to make its most advanced chips.

Global politics and regulations also bring their challenges. Trade restrictions, tariffs, and limits on sales to China could reduce demand and disrupt supply chains. Broadcom’s high stock price also makes it vulnerable.

Final Thoughts

Broadcom remains a market leader with strong growth in AI semiconductors and infrastructure software. The company’s revenue, margins, and cash flow trends reflect solid fundamentals, while product innovations like the Tomahawk Ultra and Jericho4 enhance its competitive edge.

Technical patterns support the long-term uptrend, though volatility and short-term pullbacks are possible. Moreover, the risks from competition, customer concentration, and geopolitical factors persist. However, Broadcom has shown the ability to recover quickly from setbacks. Therefore, despite these risks, the outlook for Broadcom remains bullish, and any significant dips may offer attractive buying opportunities for long-term investors. Key support levels to watch for Broadcom are $250 and $150.