VanEck Semiconductor ETF Drops 3.2% After Broadcom Q2 Revenue Miss
SMH•VanEck Semiconductor ETF slipped 3.2% after Broadcom posted Q2 revenue of $22.19 billion and guided AI chip sales at $16 billion, missing forecasts and dragging Nasdaq futures down 1.31%. Broadcom’s stock tumbled 13% premarket as AI sales growth pressured margins and raised supply competition concerns.
1. Broadcom Q2 Earnings Shock
Broadcom reported fiscal Q2 revenue of $22.19 billion, up 48% year-over-year, including AI chip sales of $10.8 billion (143% growth), but guided AI semiconductor revenue at $16 billion versus analyst expectations of $17.2 billion. Management warned that rapid AI sales growth was pressuring overall gross margins, triggering a 13% premarket stock plunge.
2. SMH ETF Reaction
The VanEck Semiconductor ETF fell 3.2% before the open, leading all major index futures declines as Nasdaq futures slid 1.31%. Key SMH holdings saw sharp drops: Arm Holdings, Marvell Technology and Micron Technology each lost around 6%, while cybersecurity firm CrowdStrike plunged 10%.
3. Geopolitical and Market Context
Escalating U.S.-Iran tensions, including missile strikes and retaliations around the Persian Gulf, added to market jitters and pressured oil with Brent crude down 2.23%. The S&P 500 was poised to end a nine-week winning streak as investors weighed earnings surprises and geopolitical risks.
