Broadcom Shares Drop 8.9% After Modest Beat and $100 Billion AI Outlook
AVGO•Broadcom shares slid about 8.9% after its quarterly revenue and EPS modestly topped consensus while its fiscal 2027 AI revenue guidance remained at $100 billion, falling short of elevated buy-side forecasts. Evercore ISI kept an Outperform rating and $582 target, noting premium ASIC margins under pressure and TPU orders shifting to other suppliers.
1. Quarterly Results Trigger Stock Decline
Broadcom reported quarterly revenue and earnings slightly above Street estimates but lacked an upbeat AI revenue outlook, reiterating fiscal 2027 AI revenue guidance of $100 billion. Investors had anticipated a higher figure given the chipmaker’s AI-driven growth narrative.
2. Analyst Commentary and Margin Concerns
Evercore ISI maintained its Outperform rating and $582 price target, describing the post-earnings dip as a buying opportunity. The firm highlighted signs of pressured premium ASIC margins and noted that TPU production was being allocated to alternative suppliers for lower-end variants.
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