Broadcom's record earnings miss AI chip forecast, sending semiconductor stocks tumbling

Broadcom posted a record quarterly revenue of $22.19 billion, a 48% increase year‑over‑year, and adjusted earnings of $2.44 per share, beating expectations. However, its projection for artificial‑intelligence chip revenue in the upcoming quarter was set at $16 billion, roughly 7% below analysts’ consensus of $17.2 billion. The shortfall triggered a sharp sell‑off, with Broadcom shares falling 12.6% and the broader PHLX Semiconductor Index dropping 7.6%, marking the worst day for the sector this year. The decline was amplified by stronger‑than‑expected U.S. May jobs data, which revived concerns that the Federal Reserve may keep interest rates higher for longer, a headwind for technology equities.

The fallout spread to other chip makers, with companies such as Micron, AMD and Intel also seeing their stocks decline as investors reassessed growth expectations for AI‑related hardware.