Broadcom Holds Its Uptrend With Analysts Eyeing 45% Upside

Broadcom Holds Its Uptrend With Analysts Eyeing 45% Upside

Broadcom (AVGO): Analysts Stay Bullish as the Chart Nears Its Breaking Point

What has been happening

Broadcom ended the week on a positive note, rallying around 3% on Friday to trade near $355. The move came after reports that Broadcom and its banks are starting to put together roughly $60 billion of new financing to help Anthropic and other AI companies pay for chips and computing infrastructure. The package is reported to include a $42 billion senior tranche, alongside an $18 billion junior tranche led by Blackstone, which plans to commit $9 billion itself.

In simple terms, Broadcom is helping its customers fund the very chips they buy from it. That is good news for future demand, but it does come with a risk worth understanding. Some investors worry about what is called circular financing, where a supplier lends money to a customer that then spends it on the supplier's products, meaning Broadcom's returns partly depend on that customer's ability to pay. It is a fair point to keep in mind, even if the scale of demand on show is hard to ignore.

The bigger picture has not changed since last month. The latest quarterly results were the strongest in the company's history, with revenue up 86% year on year to $29.6 billion and AI chip revenue up 221% to $16.7 billion. The share price weakness has come from very high expectations rather than any problem with the business itself, and the stock still sits well below its June high.

Key levels: the trend lines

The chart remains a story of two trend lines closing in on each other, and the space between them is now very narrow.

The rising trend line, which has supported Broadcom since early 2025 and runs through the April low near $295, continues to hold. Price tested it again in late September and buyers stepped in once more, leading to Friday's bounce. This line now sits around $340 to $345, and it remains the most important level on the chart.

Above, the falling trend line from the June high has capped every rally since, including the August bounce near $435. It now sits close to $380 to $385. With price around $355, there is only a small gap left in either direction.

The two lines meet around early to mid November, which means a breakout is likely in the coming weeks and quite possibly before the next set of results in early December. A daily close above the falling trend line would suggest the four month correction is over and open the way back towards $435 and the $500 area. A close below the rising trend line would be the first real break in a trend that has held for well over a year, with the April low near $295 as the next area of support.

Moving average, MACD and RSI

The 100 day moving average has now drifted down to around $380, almost exactly where the falling trend line sits. That makes the $380 to $385 area a double layer of resistance, and a clean break through it would be a meaningful signal.

The MACD is showing early signs of improvement. The MACD line has crossed back above its signal line and the histogram has turned green, which suggests selling pressure is easing. However, both lines are still below zero, so this is a sign of momentum stabilising rather than a confirmed new uptrend.

The RSI has climbed to around 47, recovering from the high 30s in September. It sits in neutral territory, neither overbought nor oversold, which fits a market coiling up before its next move rather than one already stretched in either direction.

TipRanks analyst recommendations

Wall Street remains firmly in Broadcom's corner. On TipRanks, the stock holds a Strong Buy consensus based on 27 Buy ratings, 3 Holds and no Sells over the past three months. The average 12 month price target is $519.21, around 45% above the current price, with the highest target at $630 and the lowest at $350.

The most recent call came on 2 October, when UBS analyst Timothy Arcuri reiterated his Buy rating with a $470 target. Bernstein's Stacy Rasgon has a Buy rating and a $575 target, while several analysts raised their targets after the September results, including Cantor Fitzgerald to $600 and BMO Capital to $575. J.P. Morgan sits at $580. The main cautious voice is D.A. Davidson, which holds a Hold rating and cut its target from $400 to $350.

Looking ahead, analysts expect next quarter's earnings per share of around $3.83, up from $3.32 last quarter, on sales of roughly $34.9 billion.

Fundamentals

Broadcom trades on a price to earnings ratio of roughly 45, meaning investors pay about $45 for every $1 of yearly profit. That is expensive compared with the wider market, but it reflects how quickly profits are growing. The company also continues to generate huge amounts of cash, turning almost half of its revenue into free cash flow last quarter. The dividend stands at $0.65 per share each quarter, a yield of around 0.7%, so this remains a growth story rather than an income one.

Summary

Broadcom's fundamentals are strong, analyst support is overwhelming, and the new financing news shows just how much demand there is for its AI chips. The chart, however, is still waiting for confirmation. Holding the rising trend line keeps the longer term uptrend intact, while a break above the falling trend line and the 100 day moving average near $380 to $385 would be the clearest signal that buyers are back in control. With the two lines about to meet, the next few weeks should give us an answer, and until then a patient approach with clear risk management makes the most sense.