Jun 4 (Reuters) – Broadcom shares plunged about 12% in premarket trading on Thursday, a day after the company missed quarterly revenue expectations and disappointed investors’ lofty hopes for a stronger push from the AI boom.
The chipmaker could lose more than $285 billion in market capitalization at the current price of $418.83 if losses continue.
Broadcom competes with Nvidia, whose graphics processors remain the gold standard for AI workloads, highlighting intensifying competition at the top of the AI chip market.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the sell-off reflects ‘a classic case of very high expectations meeting a market that wanted perfection’, adding that investors are punishing results that fall short of what they wanted.
Meanwhile, Broadcom Chief Executive Hock Tan maintained the company’s long-term goal of $100 billion in AI revenue.
Analysts at TD Cowen said reiterating previously ambitious AI revenue targets without increasing them in a market expecting “significantly better-than-expected results and upward revisions” will likely disappoint investors, adding that the quarter leaves “lingering questions” about execution and implementation timelines.
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Rising memory chip prices due to supply shortages have hurt the industry overall. However, company executives said Broadcom is ‘very comfortable’ having secured supply for 2026 and 2027.
Investors’ optimism was also dented by Broadcom’s pessimistic outlook for third-quarter AI chip revenue, reinforcing concerns that while demand remains strong, growth may not be increasing as quickly as markets had anticipated.
Competition is also heating up as rivals like Marvell Technology expand their custom chip businesses and deepen ties with hyperscaler customers.
Marvell shares fell about 4%.
Broadcom’s core business remained solid, with AI semiconductor revenue increasing 143% year-over-year to $10.8 billion for the quarter.
(Reporting by Rashika Singh in Bengaluru)
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