Broadcom Stock in Focus After Gains Following its AI Investor Day—Key Level to Watch

Chipmaker Broadcom Inc. (AVGO) remains in the spotlight Monday after gaining 10% last week, boosted in part by the announcement of a new artificial intelligence (AI) customer at its highly anticipated “Enabling AI Infrastructure” investor day and receiving a string of positive broker commentary on the heels of the event.

Although the Palo Alto, California-based company did not disclose a name, it said it had added a new, third customer in the consumer AI space that it will be shipping to in volume this year. Broadcom, which expects to generate $10 billion in AI chip sales this year, also discussed its AI infrastructure innovations at the event, such as AI accelerators and silicon connectivity solutions, designed to allow cloud and data center providers to scale and optimize their AI applications.

Following the event, analysts at TD Cowen upgraded the company’s shares to “outperform” from “market perform,“ citing Broadcom’s potential upside from AI infrastructure and software growth. Raymond James reiterated its “market perform” rating on the shares, pointing to generative AI sales driving the company’s semiconductor business. Citi analyst Christopher Danely also reiterated the bank’s “buy” rating on the stock.

During the company’s latest earning’s call, Broadcom CEO Hock Tan pointed to areas of AI infrastructure fueling its chip business. “Strong demand for our networking products in AI data centers, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment.”

Since a golden cross formed on the Broadcom chart in early January last year, the price has continued to trend sharply higher apart from several retracements to the 50-day moving average. Buyers immediately snapped up shares on the most recent pullback to the indicator earlier this month, indicating the bullish momentum in the stock.

Looking ahead, investors should keep a close eye on how the price responds to the stock’s all-time high (ATH) set at $1,438.17 on March 4. A convincing volume-backed breakout could lead to further upside, while a reversal at this closely-watched level could act as a profit taking catalyst.

Broadcom shares were down 0.6% at $1,345.71 in premarket trading Monday at around 7:10 a.m. ET.

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As of the date this article was written, the author does not own any of the above securities.