Broadcom’s 12.6% Plunge Follows $16B AI Chip Revenue Forecast
AVGO•Broadcom forecasted $16 billion in third-quarter AI chip revenue, missing analysts’ $17.2 billion estimate and maintaining its fiscal 2027 outlook at $100 billion. The guidance prompted a 12.6% share plunge Thursday—its steepest daily drop since January 2025—and extended premarket losses into Friday.
1. Soft AI Revenue Forecast
Broadcom projected $16 billion in third-quarter AI chip revenue versus the $17.2 billion analysts expected, while keeping its fiscal year 2027 outlook unchanged at $100 billion.
2. Stock Performance
Shares plunged 12.6% on Thursday—the steepest one-day drop since January 2025—and fell an additional 2% in Friday premarket trading after the guidance release.
3. Sector Reaction
Industry leaders saw declines as Micron dropped 3.3%, Intel and AMD each slid 2.8%, and Nvidia fell 1.4%, fueling a broader semiconductor selloff.
4. Market Implications
The iShares Semiconductor ETF has nearly doubled year to date versus an 11% gain in the S&P 500, suggesting profit taking and a sentiment reset after a prolonged AI-driven rally.
