Broadcom earnings miss triggers sharp stock drop and Nasdaq slide

Broadcom reported record second‑quarter revenue of $22.19 billion and a 48% year‑over‑year increase, driven by a 143% jump in AI‑chip sales to $10.8 billion. However, the company stuck to its existing AI‑chip revenue guidance for the next quarter, forecasting $16 billion—well below Wall Street’s expectations. The cautious outlook led to an after‑hours sell‑off of roughly 13%‑15%, pulling down the Nasdaq 100 by about 0.5%‑1% and prompting a broader rotation away from high‑growth tech stocks toward more traditional sectors. The drop also spread to other semiconductor makers, with Micron, ARM, Qualcomm, AMD and others slipping between 2% and 7%. Analysts noted that while Broadcom’s AI revenue growth remains strong and its long‑term target exceeds $100 billion, the market’s bar for performance has become extremely high. Some commentators saw the dip as a buying opportunity, but the episode underscores the fragility of the AI‑driven rally.

Broadcom’s CEO Hock Tan highlighted six major customers for custom AI chips, including Google, OpenAI, Anthropic, Meta and others, and reiterated the company’s focus on selling chips rather than full systems. Despite the revenue miss, the firm’s earnings per share beat forecasts, and its software division, boosted by the VMware acquisition, also posted solid growth.