Broadcom Rebounds as AI Demand Counters Sector Weakness

Key Moments

Analyst Call Fuels AI Optimism

Broadcom Inc. (NASDAQ:AVGO) is advancing 1.7% in pre-open trade, staging a recovery after a steep decline in the previous session. The move is being driven by a new research note from Wolfe Research, which underscored a much larger potential revenue stream tied to the company’s artificial intelligence business.

Following recent discussions with Broadcom’s management, Wolfe Research outlined a scenario in which the company’s XPU-related revenue could climb to $250–300 billion in fiscal 2028. The firm also indicated that, assuming full funding, XPU volumes supplied to Anthropic and OpenAI could triple to 15 gigawatts. Investors are interpreting this as a strong indicator of future revenue tied to AI infrastructure demand, helping to restore confidence in Broadcom’s longer-term growth profile.

Technical Rebound After Sector Selloff

The pre-market upswing is also being supported by the stock’s technical backdrop after Tuesday’s heavy selling. In the prior session, Broadcom fell -4.4% alongside a broader selloff in semiconductor names, with notable declines across NVIDIA, Micron, AMD, Intel, and Marvell. The broad-based rout pushed Broadcom toward oversold territory, setting up conditions for a short-term bounce ahead of the open.

An additional development was a Form 144 filing on June 16 disclosing a proposed sale of restricted securities by an insider. While this created a modest cautionary signal, it has not significantly dampened sentiment due to the strength of the AI-driven narrative emerging from the Wolfe Research note.

Macro Headwinds and Market Context

Broader market conditions remain challenging. The FOMC is convening its first meeting under new Chair Kevin Warsh, and traders are anticipating a restrictive policy posture in light of elevated U.S. inflation. Against this backdrop, major U.S. equity indices are under pressure today, with the Nasdaq lower by 1.2% and the S&P 500 down 0.6%.

Broadcom’s early gain stands in contrast to this weakness, particularly within technology. Semiconductor peers, including Marvell – cited as Broadcom’s closest competitor in custom AI silicon – have also come under selling pressure this week, emphasizing the stock’s relative strength in pre-market trading.

Valuation Perspective and Trading Range

The positive reaction to Wolfe Research’s XPU outlook is helping to offset both macro and sector-specific pressures that contributed to Tuesday’s decline. From a price perspective, Broadcom continues to trade well below its recent peak.

With shares at $383.21 in pre-market activity, the stock remains below the upper end of its 52-week range of $244.17 to $495.00. This gives bullish investors room to argue that the AI revenue potential highlighted in Wolfe Research’s forecast is not yet fully reflected in Broadcom’s valuation, particularly given the projected XPU revenue range of $250–300 billion in fiscal 2028 and the potential tripling of XPU volumes to 15 gigawatts for Anthropic and OpenAI.