Broadcom Inc. stock rose nearly 1% in Tuesday's premarket session as semiconductor and artificial intelligence stocks traded higher. Nasdaq futures gained 0.23%, while S&P 500 futures rose 0.11%. The stock received fresh support from Jefferies, which said the recent pullback has created a buying opportunity as visibility into future AI chip demand improves.

Jefferies reiterated its Buy rating and maintained a $550 price forecast on Broadcom. The firm cited improving visibility into calendar 2028, steady progress on Broadcom's TPU roadmap and an expanding customer base for its custom AI chip business. Jefferies expects Broadcom's TPU 8i to enter production in the third quarter of 2026.

The firm highlighted Broadcom's long-term agreement with Alphabet Inc.'s Google covering future TPU generations through 2031. The agreement includes minimum revenue commitments and could generate more than $500 billion over time. Jefferies also pointed to Broadcom's first artificial intelligence processor for OpenAI, code-named Jalapeno. The firm estimates the chip could deliver about 50% lower costs and 40% lower power consumption than NVIDIA's Blackwell platform.

Technical Picture Remains Mixed

Broadcom traded at $375.33, about 6% below its 20-day simple moving average of $399.98 and 8.6% below its 50-day SMA of $411.44. However, the stock remains 1.2% above its 100-day SMA of $371.45 and 4.1% above its 200-day SMA of $361.33. Momentum indicators remain cautious, with the moving average convergence divergence below its signal line.

Traders are watching resistance near $414.50, close to the 50-day SMA. Initial support sits around $370.50 near the 100-day SMA. The current pullback appears consistent with a broader consolidation rather than a complete trend reversal.

Analysts Remain Bullish Ahead Of Earnings

Broadcom is expected to report earnings around Sept. 3. Wall Street expects earnings of $3.16 per share on revenue of $29.44 billion, compared with earnings of $1.69 per share and revenue of $15.95 billion a year earlier. The stock carries a consensus Buy rating with an average price forecast of $513.68.

Recent analyst actions include UBS lowering its price forecast to $485 while maintaining Buy. Bank of America Securities and Mizuho both raised their price forecasts to $530 and maintained bullish ratings. Broadcom holds a strong Quality score of 95.71 and a Momentum score of 74.22, though its Value score remains low at 7.25.

Broadcom Inc shares fell approximately 20% in June despite the company reporting record fiscal Q2 results and unveiling a new AI chip with OpenAI. The decline follows a revenue miss and investor concerns over the stock's premium valuation, overshadowing significant growth in its semiconductor business.

Record Q2 Earnings

Broadcom reported fiscal Q2 2026 revenue of $22.19 billion, a 48% increase year-over-year, though it missed the consensus estimate of $22.27 billion. Earnings per share of $2.44 beat the $2.40 consensus. AI semiconductor revenue surged 143% year-over-year to $10.8 billion, driven by demand for custom AI accelerators and AI networking.

The Jalapeño Reveal

On June 24, Broadcom and OpenAI unveiled Jalapeño, OpenAI's first custom AI inference chip. Broadcom handled the silicon implementation, networking, and connectivity technologies, while OpenAI designed the architecture. The chip moved from initial design to manufacturing tape-out in nine months. Early testing indicates performance per watt will be substantially better than current alternatives, with initial deployment targeted for the end of 2026.

Technical Analysis

Despite the recent pullback, Broadcom is holding above its 200-day moving average of $361.17. However, the stock is trading below its 20-day SMA of $406.77 and 50-day SMA of $412.60. The stock trades at a P/E of 63.0x, which remains a point of contention for investors.

Earnings & Analyst Outlook

The next major catalyst is the estimated earnings report on Sept. 3, 2026. Wall Street anticipates earnings per share of $3.16 on revenue of $29.43 billion. The stock maintains a Buy rating with an average price target of $513.68.