Broadcom Inc (NASDAQ: AVGO) shares slid on Thursday after a report said its AI chip partnership with OpenAI ran into an $18 billion financing challenge tied to the first phase of chip production. The stock is rebounding in premarket trading on Friday. Microsoft Holds The Key To The Deal
According to The Information, Broadcom wants Microsoft Corp. (NASDAQ: MSFT) to commit to buying roughly 40% of the chips before financing the initial 1.3-gigawatt deployment.
Under the proposed structure, Microsoft would install the chips in its data centers and lease the capacity back to OpenAI.
The report said Broadcom views Microsoft's purchase commitment as critical to securing repayment confidence, while OpenAI considers the project important to lowering long-term server costs and improving profit margins as it expects operations to consume more than $200 billion through 2029.
Meanwhile, analysts continue to view the deal as a major long-term opportunity for Broadcom's AI infrastructure and custom silicon businesses.
Broadcom Technical Analysis
Broadcom's longer-term trend remains firmly bullish: the stock is trading above its 20-day, 50-day, 100-day, and 200-day moving averages, which keeps the primary trend pointed higher even after recent swings.
The distance versus trend gauges is still stretched-about 2.7% above the 20-day SMA and roughly 17% to 22% above the 50-day through 200-day SMAs-so the chart is rewarding dip-buyers, but it also leaves less room for error if momentum cools.
The golden cross in April (50-day SMA moving above the 200-day SMA) reinforced the uptrend, and the stock has continued to hold well above those longer-term baselines, a sign institutions are still defending the broader move.
For momentum, MACD is the cleaner read right now: with MACD below its signal line and the histogram negative, it suggests upside pressure is cooling versus the prior upswing unless buyers can re-accelerate the trend.
- Key Support: $370.50 - a prior demand zone that also sits near the rising 50-day EMA area ($372.89), making it a key "line in the sand" on pullbacks
- Key Resistance: $429.50 - a nearby pivot area just above current levels where rebounds can stall
Looking further out, the next major catalyst for the stock arrives with the June 3, 2026 (confirmed) earnings report.
- EPS Estimate: $2.32 (Up from $1.58 YoY)
- Revenue Estimate: $22.06 Billion (Up from $15.00 Billion YoY)
- Valuation: P/E of 80.4x (Indicates premium valuation relative to peers)
- Mizuho: Outperform (Maintains forecast of $480.00) (April 16)
- Wells Fargo: Overweight (Maintains forecast of $430.00) (April 15)
- JP Morgan: Overweight (Maintains forecast of $500.00) (April 15)
AVGO Price Action: Broadcom shares were up 1.68% at $419.50 during premarket trading on Friday. The stock is approaching its 52-week high of $437.68, according to Benzinga Pro data.