**Broadcom Shares Drop Following Results That Meet Wall Street Expectations**

Broadcom shares experienced a significant drop on Friday, falling 5% to around $247, despite the company's recent results and future outlook aligning closely with Wall Street estimates. This decline came right after the chip manufacturing giant had achieved a record-high earlier in the week, buoyed by strong expectations for revenue growth driven by increased demand for generative AI technology.

The preceding Thursday saw a wave of profit-taking, as trading volumes spiked to the highest they've been in two months. This profit-taking occurred just as the stock hit new highs, setting the stage for Friday's notable dip. Additionally, the relative strength index (RSI) for the stock had recently topped 80, a metric that has historically coincided with significant highs for Broadcom in both December of last year and this past June.

During the company's earnings call, CEO Hock Tan expressed optimism about the future, noting that chip demand could accelerate in the second half of 2026 due to strong inference demand, referring to the usage of trained AI models for decision-making and predictions. However, the market reaction suggested that investors were hoping for even more after seeing rival Nvidia's spectacular results last week.

Technically, Broadcom's shares were trading within a rising wedge pattern, experiencing resistance from the upper trendline. The $250 level was identified as a significant support point, supported by the pattern's lower trendline and a series of peaks from December and January. With shares closing below this critical level, the next support zone appears around $235, a point of interest stemming from a peak in February. Should the decline continue, the stock could further drop to the psychological $200 mark, near the 50-day moving average and January's swing low.

Looking forward, investors are advised to keep an eye on the $265 area as an important overhead resistance level. If recovery efforts are successful, tactical traders may decide to take profits near this all-time high, coinciding with the peak of the rising wedge pattern.