Broadcom Shares Hit Record High on AI Optimism, Technicals Signal Caution

Broadcom's stock surged to an all-time high this week, climbing nearly 10% to close near $370 amid renewed enthusiasm for AI-related chipmakers. The rally positions the company as a growing competitor to Nvidia in the AI compute market, with Melius Research projecting Broadcom could capture 30% market share over time.

Technical indicators suggest potential consolidation ahead. The Relative Strength Index has reached overbought levels similar to those preceding significant pullbacks in late 2021 and mid-2023. Chart analysis points to key support levels at $250 and $185 should profit-taking emerge.

The semiconductor firm's gains reflect broader momentum in AI infrastructure plays, fueled by strong quarterly results, a new $10 billion customer commitment, and Oracle's recent backlog surge. Bars pattern analysis suggests a bullish price target of $680 by October 2024 if the current trend sustains.