Broadcom’s Soft Guidance Sparks 10% Semiconductor Sell-Off, Backs $35B AI Financing
AVGO•Broadcom’s softer-than-expected guidance and stronger-than-expected May jobs report triggered a 10% sell-off in semiconductor stocks, driving AVGO shares lower as investors took profits. Meanwhile, Broadcom is backstopping payments on a $35 billion Anthropic chip financing deal and will launch its AI XPV platform to deploy over 20 gigawatts of compute by 2028.
1. Soft Revenue Guidance and Jobs Report Pressure Stocks
Broadcom projected weaker-than-expected full-year revenue while the US economy added more than double the expected job gains in May, fueling investor concerns over tighter monetary policy and triggering a 10% sell-off across semiconductor shares.
2. Broadcom Backstops $35B Anthropic Financing Deal
Broadcom agreed to backstop the largest senior tranches of a $35 billion private credit package arranged by Apollo and Blackstone to fund Google’s custom chips for Anthropic, highlighting its growing role in AI chip financing.
3. Launch of AI XPV Platform and Future Compute Capacity
CEO Hock Tan said Broadcom is creating its AI XPV platform with Apollo, Blackstone and other investors to deploy over 20 gigawatts of compute capacity for leading AI frontier labs, including Anthropic and OpenAI, through 2028.
4. Investor Reaction and Fed Policy Implications
The convergence of sector profit-taking and robust labor data has intensified speculation around additional Federal Reserve rate hikes, contributing to short-term volatility in AVGO shares and the broader chip sector.
