Broadcom stock price has retreated sharply in the past few days as investors assess reports that it may be interested in acquiring part of Intel. AVGO has also dropped amid jitters that the artificial intelligence (AI) industry is slowing. It dropped to a low of $212 this week, down by about 15% from its highest level this year.
Broadcom is interested in parts of Intel
The most important Broadcom stock news is that it is seriously considering a bid for some parts of Intel, a fallen angel that has become a shell of its former self. In this arrangement, Broadcom would take Intel’s chip design and marketing businesses, while Taiwan Semiconductor is considering its design factories.
Such a deal would likely make sense for Broadcom since it would give it access to Intel’s chip business that competes directly with the likes of NVIDIA and Broadcom. The challenge, however, is that Intel’s market share in the CPU and GPU industries is slowing, with top customers like Apple and Microsoft designing their chips internally.
Still, it is unclear whether the United States government would greenlight such a deal for national security reasons. TSMC is a Taiwanese company that could be under pressure if China invades Taiwan.
While Broadcom is registered as an American company, it was a Singapore entity until it changed its headquarter to the US.
Read more: Broadcom stock unique pattern points to AVGO hitting $200
AI demand concerns remain
Broadcom stock price has also come to the spotlight as concerns about the artificial intelligence industry remain. These concerns have escalated after China’s DeepSeek AI, which has shown that it is possible to build advanced AI models using less advanced chips.
NVIDIA’s earnings demonstrated that the AI industry is still doing well as companies like Microsoft and Amazon continue spending. However, the guidance was relatively weaker than expected.
The most recent Broadcom earnings showed that its business was doing well, helped by its AI business. Its total revenue rose by 51% to $14 billion, partly because the figure included VMware.
Its annual revenue rose by 44% to $51.6 billion, helped by its infrastructure software, which grew to $21.5 billion. Its semiconductor business, which includes its AI business rose to $30.1 billion.
Broadcom has been helped by the diversity of its business. It offers numerous services, including cybersecurity, which it offers through its Symantec brand. It also offers software solutions through its CA Technologies, which it bought for $18.9 billion.
Analysts expect that Broadcom’s business will continue doing well as its growth momentum slows. The average estimate is that its revenue will grow by 21% to $14.6 billion in the current quarter, followed by $14.7 billion in the next one. The annual revenue will grow to $61.34 billion followed by $70.9 billion in the next financial year.
These numbers mean that Broadcome is fairly overvalued since it has a forward P/E ratio of 33.4 and a market cap of over $1.06 trillion.
Broadcom stock price analysis
AVGO chart by TradingView
The daily chart shows that the AVGO share price formed a double-top pattern at $251, which explains why it has dropped sharply in the past few days. This retreat happened as the stock formed an island pattern, which is often a sign of a reversal.
It has moved below the 50-day moving average and is above the key support level at $185.55, the upper side of the ascending triangle pattern. Therefore, the most likely scenario is where the Broadcom stock price will retreat and retest the support at $185 and then resume the uptrend.
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