What Is Going on With Broadcom Stock on Monday?

Broadcom Inc. (NASDAQ:AVGO) stock rose about 7.5% Monday as investors returned to beaten-down AI infrastructure names while also weighing the company’s latest push to expand VMware’s usefulness across cloud environments.

The SPDR S&P 500 ETF Trust was up about 1.9%, part of a broader rebound in technology stocks.

Broadcom Rebounds After AI Infrastructure Selloff

Monday’s gain follows a volatile stretch for Broadcom.

On Friday, the stock jumped nearly 6% in premarket trading after falling more than 10% on Thursday, when concerns about data-center construction and the potential impact of U.S. midterm election results on AI infrastructure spending pressured sentiment.

During Thursday’s selloff, the Nasdaq 100 fell 6.4% and the S&P 500 dropped 4.4%, with an estimated $3.2 trillion in market value erased in a single session.

With the market higher Monday, investors are again reassessing the durability of spending on custom AI chips and networking infrastructure.

Broadcom Expands VMware Strategy

Broadcom said Monday that its VM API project has been accepted into the Cloud Native Computing Foundation Sandbox. The open-source project lets companies provision and manage virtual machines through Kubernetes across different infrastructure providers.

The company is also co-chairing a new Kubernetes working group aimed at a shared standard for how workloads run, which could make VMware more useful to enterprises managing AI, security and other workloads across multiple technology providers.

Broadcom also said more than 20 new partner solutions have been validated for VMware vSphere Kubernetes Service, expanding customer choice across monitoring, security, data, AI, application delivery and storage.

Technical Picture Remains Under Pressure

Despite Monday’s gain, Broadcom remains below its major moving averages.

The stock trades about 4% below its 20-day simple moving average (SMA) of $330.24, about 9% below its 50-day SMA of $346.85, about 14% below its 100-day SMA of $366.48 and about 14% below its 200-day SMA of $367.08.

Earnings And Analyst Outlook

Broadcom’s next confirmed earnings report is scheduled for Dec. 9.

Analysts expect EPS of $3.88, up from $1.95 a year earlier, and revenue of $35.03 billion, compared with $18.02 billion.

The stock trades at a P/E multiple of 37.5 times.

Broadcom carries a Buy consensus rating with an average price forecast of $523.77.

Recent actions include Rosenblatt maintaining Buy with a $600 price target on Oct. 27, DA Davidson upgrading Broadcom to Buy and raising its price target to $400 the same day, and Tigress Financial initiating coverage with Buy and a $600 price target on Oct. 22.

ETF Exposure

Broadcom carries a 9.27% weighting in the Invesco PHLX Semiconductor ETF, 9.43% in the Pacer Data and Digital Revolution ETF and 9.95% in the Inspire 500 ETF.

Those weightings leave Broadcom exposed to broader semiconductor and technology fund flows alongside company-specific developments.

Price Action

AVGO Price Action: Broadcom shares were up 7.52% at $315.77 at the time of publication on Monday, according to Benzinga Pro data.

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