Will AVGO Stock Break the $350 Resistance after Broadcom Earnings Beat or Head Under $300?

Stock Performance and Market Reaction

Broadcom Inc. (Nasdaq: AVGO) has been in retreat since early December, reflecting investor caution toward mega-cap semiconductor names. However, sentiment shifted following the company’s first-quarter fiscal 2026 results, with shares jumping in after-hours trading as investors responded positively to stronger-than-expected performance and upbeat guidance.

Strong First-Quarter Financial Results

For the quarter ended February 1, 2026, Broadcom reported revenue growth of 29% year-over-year and significant expansion in earnings and cash flow. It also continued operating leverage supported by high EBITDA margins.

Semiconductor solutions led the way, surging 52% year-over-year and increasing their contribution to total revenue. Free cash flow remained robust, reinforcing the company’s strong capital generation profile.

Record Revenue

Broadcom achieved record first-quarter revenue, fueled by continued strength in AI semiconductor solutions. AI revenue reached $8.4 billion, up 106% year-over-year, while growth was driven by strong demand for custom AI accelerators and AI networking

Management expects AI semiconductor revenue to rise further to $10.7 billion in Q2. CEO Hock Tan highlighted accelerating AI momentum as a key growth engine.

Technical Analysis – The Lower Highs Continue

Broadcom entered the new year on uncertain footing, with its share price dipping below $300 as confidence across the AI semiconductor complex began to fray. After months of near-uninterrupted gains, investors have turned more defensive, questioning how much of the AI opportunity is already priced into leading infrastructure names.

AVGO Chart Daily – The 100 SMA Is Under Attack

The bearish momentum continued and AVGO shares fell sharply last week, threatening to break the 100-day simple moving average (red) which has acted as support before but we’re seeing a retest again. However the 100 SMA held as support and today we’re seeing a strong rebound of 4% in after hours trading, taking the stock to $330.

Broadcom Q1 FY2026 Results: Strong Growth Across Revenue, Profit and Cash Flow

🔹 GAAP Financial Highlights (Q1 FY2026 vs Q1 FY2025)

Net Revenue:

• $19.31 billion vs $14.92 billion
• +29% year-over-year

Net Income:

• $7.35 billion vs $5.50 billion
• +34% YoY

Diluted EPS:

• $1.50 vs $1.14
• +32% YoY

🔹 Non-GAAP Financial Highlights

Net Revenue:

• $19.31 billion (same as GAAP)
• +29% YoY

Net Income:

• $10.19 billion vs $7.82 billion
• +30% YoY

Diluted EPS:

• $2.05 vs $1.60
• +28% YoY

🔹 Cash Flow & Profitability Metrics

Cash Flow from Operations:

• $8.26 billion vs $6.11 billion
• +35% YoY

Adjusted EBITDA:

• $13.13 billion vs $10.08 billion
• +30% YoY

Free Cash Flow:

• $8.01 billion vs $6.01 billion
• +33% YoY

Capital Expenditures:

• $250 million during the quarter

Quarter-End Cash & Equivalents:

• $14.17 billion (down from $16.18 billion in prior quarter)

🔹 Revenue Breakdown by Segment

Semiconductor Solutions

• $12.52 billion (65% of total revenue)
• $8.21 billion in Q1 FY2025 (55% of total)
• +52% YoY growth
• Major driver of overall revenue expansion

Infrastructure Software

• $6.80 billion (35% of total revenue)
• $6.70 billion in Q1 FY2025 (45% of total)
• +1% YoY growth
• Stable but slower growth compared to semiconductor division

🔹 Shareholder Returns

• Quarterly dividend paid: $0.65 per share
• Total dividend payout: $3.09 billion
• Payment date: December 31, 2025

📊 Q2 FY2026 Outlook (Ending May 3, 2026)

• Revenue Guidance: Approximately $22.0 billion
• Adjusted EBITDA Margin Guidance: Around 68% of projected revenue

Outlook and Cautious Note

Broadcom guided for approximately $22 billion in second-quarter revenue, signaling continued strength. However, despite the upbeat outlook and AI-driven growth, the recent stock pullback suggests investors remain sensitive to valuation risks, cyclicality in semiconductors, and broader market volatility. Sustaining current momentum may depend on continued AI demand and stable macro conditions.