The Broadcom stock price has crashed in the past few days as the market remains concerned about the artificial intelligence (AI) industry. AVGO shares plummeted to a low of $200 on Friday, down by over 20% from its highest level this year, meaning that it has moved into a bear market. So, will the stock rise or fall ahead of earnings?
Broadcom stock price crashes ahead of earnings
Broadcom, the giant technology company, has come under pressure in the past few days. This performance happened after the company expressed interest in acquiring parts of Intel, a company that once dominated the semiconductor industry.
Broadcom stock has also crashed after last week’s NVDIA earnings, which provided more color about the AI industry. NVIDIA’s revenues jumped to over $38 billion, and the company boosted its forward guidance, estimating that its Q1 revenues will be over $43 billion.
Wall Street analysts are concerned that the AI industry may go through strong slowdown in the coming months. This slowdown will happen because the return to the biggest AI companies have been minimal so far. For example, corporates have shunned Microsoft’s copilot product because of its higher costs.
There are also concerns about the impact of the technology behind DeepSeek, the Chinese AI company that has disrupted the industry.
Wall Street analysts expect that the Broadcom’s finances will continue doing well. The average estimate is that its revenue will be $14.6 billion, a 22% increase from the $11.9 billion it made in the same period a year earlier. This revenue growth will partially be because it acquired VMware in a $66 billion deal.
The average estimate for its first quarter revenue will be $14.7 billion, a 18% increase from what it made last year. Analysts expect that Broadcom’s annual revenue will grow by 18.8% to $61.2 billion and $70.8 billion in 2026.
Broadcom’s profits are also expected to keep growing. The average earnings per share will grow from $1.1 to $1.5, with the annual one moving from $4.87 to $6.35. There are chances that its earnings will be higher than expected as it has always done in the past.
Is AVGO stock a good buy ahead of earnings?
AVGO stock price soared by 25% when it published the last financial results. It dropped by 10% after the previous earnings report. It rose by about 15% during the last earnings report.
Therefore, it is relatively difficult to predict whether the AVGO share price will rise or fall after the earnings report.
Analysts are highly optimistic about the Broadcom stock price. The average AVGO stock price target is $246.58, much higher than the current $200. Some of the most bullish analysts are from companies like Morgan Stanley, Barclays, Mizuho, and Barclays.
The daily chart shows that the Broadcom share price has remained above the 50-day and 100-day moving averages. It has also formed an island reversal pattern. Therefore, there is a risk that the stock will drop as bears target the key support at $186.5, the upper side in October and December last year.
Read more: Broadcom stock price has crashed: time to buy the AVGO dip?
The post Broadcom stock price forecast: is AVGO a buy ahead of earnings? appeared first on Invezz