Broadcom shares plunge 13% after AI revenue outlook falls short

Broadcom Inc. reported a 48% revenue increase for its fiscal second quarter, driven by a surge in AI semiconductor sales that more than doubled year‑over‑year to $10.8 billion. However, the company’s guidance for fourth‑quarter AI revenue of $16 billion missed the Wall Street consensus of $17.2 billion. The shortfall triggered a sharp sell‑off, with the stock dropping about 13% in pre‑market trading and sliding up to 16% intraday.

The market reaction extended to other tech names, with CrowdStrike and Petco also seeing declines. Despite the volatility, some analysts raised Broadcom’s price target, citing its strong product portfolio, strategic acquisitions, and solid cash flow. Institutional investors such as Consolidated Capital Management and Vanguard added to their Broadcom holdings during the quarter, underscoring confidence in the company's longer‑term prospects.

Broadcom’s customers include major AI developers like Google, Meta, Anthropic and OpenAI, and the firm expects AI‑related sales to represent a growing share of total revenue in coming years.