Key facts
- Broadcom's stock closed down 12.6% on Thursday, erasing $280 billion in market cap.
- Q3 AI semiconductor revenue was guided to $16 billion, below analyst expectations of $17.2 billion.
- CEO reiterated the FY2027 AI revenue target of "in excess of $100 billion" without raising it.
- Broadcom reported record Q2 revenue of $22.19 billion, up 48% year-over-year.
- The stock had rallied over 40% in the weeks leading up to the earnings report.
- Micron stock fell 7.7%, erasing $94.24 billion in market cap.
Broadcom's stock closed down 12.6% on Thursday, erasing approximately $280 billion in market value, marking one of the largest single-day losses for a megacap company. The sell-off was triggered by a guidance miss on AI semiconductor revenue for the third quarter, which was projected at $16 billion, representing over 200% year-over-year growth but falling short of the roughly $17.2 billion analysts had modeled. This occurred despite Broadcom reporting record Q2 revenue of $22.19 billion (up 48% year-over-year) and non-GAAP EPS of $2.44, which beat consensus estimates. CEO Hock Tan reiterated the company's fiscal year 2027 AI revenue target of "in excess of $100 billion," rather than raising it, which failed to satisfy investors who had driven the stock up more than 40% leading into the earnings report. The broader chip sector was also affected, with Micron falling 7.7%, AMD down 3.6%, Intel down 0.8%, and the PHLX Semiconductor Index dropping 2.2%. Nvidia was a notable exception, finishing up 1.94%. Analysts noted that Broadcom's results were impressive but cast a shadow over the sector, with the steady AI outlook rather than an upgrade triggering profit-taking in high-valuation chipmakers.