This article first appeared on GuruFocus.

Broadcom (NASDAQ:AVGO) shares fell in extended trading after its artificial intelligence chip forecast came in below Wall Street expectations, suggesting the company’s AI buildout may be moving more slowly than investors had hoped. The company said AI semiconductor revenue will reach $16 billion in the fiscal third quarter, which runs through July, compared with the $17.2 billion average estimate from analysts. CEO Hock Tan also said Broadcom expects to sell $56 billion in AI chips in the fiscal year ending in October, below the $57.6 billion average estimate.

The miss mattered because expectations had already moved sharply higher. Broadcom had added roughly $270 billion in market value over the previous five trading sessions, driven by optimism that the company could become a major alternative supplier in the AI chip market. The stock dropped more than 10% in late trading, despite second-quarter revenue rising 48% to $22.2 billion and adjusted earnings reaching $2.44 a share. Analysts had expected $22.1 billion in sales and $2.39 in adjusted earnings. AI semiconductor revenue in the quarter reached $10.8 billion, slightly ahead of the $10.7 billion average estimate.

The central question for investors is now timing. Broadcom has signed and expanded long-term deals with major AI customers including Alphabet’s Google, Anthropic and Meta Platforms (NASDAQ:META), but some of that demand may be recognized over multiple years rather than immediately each quarter. Tan said Broadcom’s financing partnership with Apollo Global Management and Blackstone could help support AI computing demand for Anthropic and OpenAI, with more than 20 gigawatts of computing capacity expected through 2028. Broadcom has already started delivering chips to OpenAI, is on track for production later this year, and has a contract to deploy 1.3 gigawatts of capacity in 2027 as part of a broader 10-gigawatt agreement by 2029. For Meta, Broadcom expects to deploy 3 gigawatts of computing power through the end of 2028, with an initial 1-gigawatt order beginning delivery in the second half of next year.