Broadcom shares plunge 20% after earnings guidance miss, sparking investor debate

Broadcom reported record Q2 revenue of $22.2 billion, driven by a 143 % year‑over‑year surge in AI semiconductor sales that lifted total AI revenue to $10.8 billion. However, the company’s forward guidance for the next quarter fell short of Wall Street expectations, causing the stock to tumble about 20 % and prompting analysts to question whether AI demand is peaking.

The sell‑off coincided with notable investor activity. Marietta Investment Partners reduced its Broadcom stake by 12.7 % in the fourth quarter, while other firms such as REAP Financial Group, Private Wealth Asset Management and BlackDiamond Wealth increased their holdings. Insider sales also intensified, with CFO Kirsten M. Spears and Mark D. Brazeal collectively disposing of more than 86 000 shares valued at over $27 million in March.

Despite the decline, Broadcom retains a strong position in AI hardware, supplying custom accelerators and high‑capacity networking equipment to major tech firms like Alphabet, Meta, Anthropic and OpenAI. Analysts remain divided on whether the dip presents a buying opportunity, given the company’s long‑term AI revenue outlook and a price‑to‑sales ratio that remains above its historical average.