Broadcom AVGO shares fell 3.2% in pre-market trading amid profit-taking and defense sector gains.

Broadcom (AVGO) shares fell 3.2% in pre-market trading on January 9, 2026, amid a broader market rotation out of technology stocks as investors locked in profits after a recent rally. The decline aligned with a sector-wide pullback, with the Nasdaq lagging major indices as high-growth tech equities faced selling pressure.

Defense stocks gained traction following President Trump’s proposed $1.5 trillion 2027 defense budget, shifting capital away from tech. Analysts noted the drop reflected short-term profit-taking rather than a fundamental reevaluation of Broadcom’s business. Recent analyst upgrades, including Truist Securities raising its price target to $510 and UBS to $475, underscored continued confidence in the company’s AI-driven growth trajectory despite post-earnings volatility.

Broadcom’s stock has declined 4.4% year-to-date, trading 19.5% below its 52-week high. While near-term margin concerns and customer in-house design risks weighed, the stock remains supported by robust AI semiconductor demand and a $73 billion backlog. Analysts view the pullback as a potential buying opportunity amid broader market fluctuations.

Despite the near-term decline, the fundamentals remain intact with AI-driven demand and strong backlog figures supporting the long-term case. The current correction could offer a strategic entry point for investors who have followed a disciplined approach to risk management and are focused on long-horizon growth.

Looking ahead, investors should closely monitor earnings calls and guidance for clues about near-term execution risks while maintaining a longer-term perspective on the AI semiconductor industry’s expansion. With the stock trading at a discount to its 52-week high, patience and a focus on fundamentals may yield favorable results for those with a measured approach.