Stock price surges 13% for Broadcom following announcement of $5.2B in AI revenues; investors speculate potential $349 price spike

In a significant development for the technology sector, Broadcom's shares have been riding a wave of record earnings, a bullish technical setup, and immense market participation. The stock, currently trading around $345, broke out of a symmetrical triangle pattern, a move often viewed as a bullish signal, and has been steadily climbing.

Analysts predict a breakout target of approximately $349 for Broadcom's stock, with a potential rally that could see prices test the level of approximately $375. This optimistic outlook is supported by the strong demand for Broadcom semiconductors, particularly from major cloud companies pushing AI capacity further.

The third-quarter revenue for Broadcom reached $15.95 billion, a significant increase from previous quarters. This growth is evident in the company's AI sales, which surged by 63% to reach $5.2 billion. Broadcom expects this trend to continue, predicting AI sales to reach $6.2 billion in the next quarter.

The stock rally was strengthened by the shift in net income. Broadcom's net income rose to $4.14 billion compared to a loss in the previous year, indicating a strong financial performance. Trading volume surged to beyond 31 million shares, a level not seen since June, reflecting the high interest in Broadcom's shares.

However, it's not all smooth sailing for Broadcom. If the rally were to falter, a dip below $282 could send shares to $265, a key support zone for the company's shares. There is also a psychological barrier of $350 for Broadcom's shares, and a move above this level may open the door toward $375. On the other hand, a deeper correction may test $247, an area linked to earlier highs and trendlines.

Investors are now focusing on the $282 support and $349-$350 resistance area to determine the next move for Broadcom's shares. The company's performance, challenging Nvidia in the market, has caught the attention of a large, unnamed customer who has placed a $10 billion order with Broadcom for custom AI chips, expected to start delivery in 2026.

In conclusion, Broadcom's shares are currently experiencing a surge in value, driven by strong financial performance, increased demand for semiconductors, and a bullish technical setup. However, investors will be closely watching the $282 support and $349-$350 resistance area for signs of the next move in Broadcom's stock price.