The coming week presents a study in contrasts for Broadcom shareholders. On Tuesday the company distributes its quarterly dividend of $0.65 a share, a cash return that lands just as the stock teeters above a long-term moving average. Friday’s close of €321.05 marked a near‑4% single‑day slide, leaving the equity down almost 11% over the preceding five sessions. Yet the backdrop also includes a newly unveiled AI chip partnership with OpenAI and a revenue pipeline that management has pegged at over $100 billion.
The chip, code‑named “Jalapeño,” is expected to enter data‑center deployment by the end of 2026. Its development cycle — just nine months from initial sketch to manufacturing readiness — sets a speed record for high‑performance semiconductors. Broadcom used OpenAI’s own AI models to accelerate the design process, and early lab tests already point to marked improvements in energy efficiency over existing leading products. CEO Hock Tan has described customer demand as “insatiable.” Together with Microsoft and other partners, the company is building out infrastructure capacity that, under a contract running to 2029, encompasses a massive ten gigawatts of new computing power.
Wall Street, however, has been more focused on the margin implications of that ambitious target. The stock has been under pressure since Broadcom’s last quarterly report, in which the company forecast AI‑related revenue of more than $100 billion — a figure that some investors found disappointing relative to the capital required. Yet analysts have largely shrugged off the sell‑off. Of the 42 analysts covering the stock, 34 rate it a strong buy, and the average price target stands at $516.59. Individual banks are even more bullish: JPMorgan sees $580, Oppenheimer $535, and UBS $485.
The fundamental data that drove the most recent quarter remain solid. Second‑fiscal‑quarter revenue jumped 48% to $22.18 billion, while net income surged 88% to $9.31 billion. Free cash flow exceeded $10 billion. For the third quarter, which ends in early August, management guides for revenue around $29.4 billion and an adjusted operating margin of roughly 67%.
Should investors sell immediately? Or is it worth buying Broadcom?
With no company‑specific events scheduled this week, traders will turn to U.S. macro data for directional cues. The ISM manufacturing Purchasing Managers’ Index lands on Wednesday, followed by the official June employment report on Thursday. Both sets of numbers influence expectations for interest rates and, by extension, risk appetite for high‑valuation technology names. The trading week is truncated — U.S. markets are closed Friday for Independence Day.
Technically, the stock is approaching a decisive juncture. The 200‑day moving average sits at €310.50, just 3.4% below Friday’s close. A break below that level could trigger further selling pressure; the 50‑day average, at €354.29, is already more than 9% above the current price, underscoring the speed of the recent decline. If support holds over the four‑day trading window, it could provide a base for stabilization ahead of the next earnings report, expected on September 3.
In the meantime, shareholders will collect the quarterly dividend — the fifteenth consecutive annual increase in the payout, supplemented by a multi‑billion‑dollar share buyback program. The immediate cash return offers a small cushion, but the market’s attention is fixed on whether the 200‑day line can hold while the Jalapeño chip and the broader AI roadmap build toward a longer‑term payoff.
Ad
Broadcom Stock: Buy or Sell?! New Broadcom Analysis from June 28 delivers the answer:
The latest Broadcom figures speak for themselves: Urgent action needed for Broadcom investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from June 28.
Broadcom: Buy or sell? Read more here...
