{"id":714865,"date":"2026-06-04T16:29:14","date_gmt":"2026-06-04T16:29:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/714865\/"},"modified":"2026-06-04T16:29:14","modified_gmt":"2026-06-04T16:29:14","slug":"broadcom-set-to-shed-us300-billion-in-value-as-ai-results-fail-to-impress","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/714865\/","title":{"rendered":"Broadcom set to shed US$300-billion in value as AI results fail to impress"},"content":{"rendered":"

Broadcom (AVGO-Q<\/a>) shares slumped more than 14 per cent on Thursday, dragging chip peers lower, after the company\u2019s results fell short of lofty expectations around demand for its custom AI chips \u2060business.<\/p>\n

The losses, \u200bif sustained, will erase more than US$315 billion from the company\u2019s market value of about US$2.268 trillion, in one of the biggest one-day wipeouts ever.<\/p>\n

Broadcom\u2019s crucial role in helping design in-house processors of firms like Alphabet and Meta that serve as alternatives to Nvidia\u2019s costly chips has made it one of the \u200bbiggest winners of the AI boom.<\/p>\n

After years of treading water, \u200cits stock has jumped more than eightfold since ChatGPT\u2019s 2022 launch.<\/p>\n

Shares have climbed 38 per cent this year, as of last close, including a 15 per cent rally in the two weeks ahead of its earnings after rival Marvell Technology\u2019s strong results.<\/p>\n

But Broadcom faces tougher competition and its eye-watering gains have left little room for error, analysts said, adding the decision to \u200creiterate, rather \u200bthan raise, its US$100 billion AI revenue \u200cforecast for fiscal 2027 disappointed investors.<\/p>\n

Its second-quarter revenue of US$22.19 billion also missed expectations, while its current-quarter \u200bAI chip sales forecast of US$16 billion was slightly below Wall Street \u2060estimates.<\/p>\n

Still, the US$16 billion would mark an over three-fold jump from about US$5.2 billion a year \u2060ago. The US$100 billion forecast given in March also shows how quickly the company has gained ground in the chip race. AI \u200brevenue stood at just US$20.2 billion in fiscal 2025.<\/p>\n

It is \u201ca classic case of very high expectations meeting a market that wanted perfection,\u201d Matt Britzman, senior equity analyst at Hargreaves Lansdown, said. \u201cBroadcom is one of the more exciting names in the AI infrastructure buildout, but it also came into results as one of the higher-risk names.\u201d<\/p>\n

The results sparked a \u2060selloff in chip stocks, with Marvell down nearly 5 per cent, while AMD, Intel, Micron , and Qualcomm fell between 1.6 per cent and 6.5 per cent. The stocks had gained sharply earlier this week thanks to a flurry of positive announcements at Computex.<\/p>\n

To be sure, Broadcom CEO Hock Tan said the company now expects to ship more than 10 gigawatts\u2019 worth of AI chips in 2027, a slight increase from previous estimates.<\/p>\n

Executives also \u2060said the company was \u201cvery comfortable\u201d amid the memory chip supply \u200bcrunch, having secured supply for 2026 and 2027.<\/p>\n

Confident of the company\u2019s long-term prospects, at least 22 analysts raised their \u2060price targets on Broadcom\u2019s stock, pushing the median view to US$500, according to LSEG data. That represented a more than 4 per cent upside to the \u200cstock\u2019s last close.<\/p>\n

The stock trades at 29.90 times its forward earnings estimates, compared with Marvell\u2019s 61.70 multiple and \u200bthe broader S&P 500 index\u2019s 27.94.<\/p>\n

\u201cWe suspect the shares may take a pause for the next couple of quarters. But the story gets interesting again once we enter 2027,\u201d Bernstein analyst Stacy Rasgon said in a note.<\/p>\n

\u201cIf we have to wait a quarter or two for \u200bthat story to re-emerge, that\u2019s OK, we\u2019ll wait for it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Broadcom (AVGO-Q) shares slumped more than 14 per cent on Thursday, dragging chip peers lower, after the company\u2019s…\n","protected":false},"author":2,"featured_media":714866,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,901,276,277,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-714865","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alberta","tag-artificial-intelligence","tag-artificialintelligence","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/714865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=714865"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/714865\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/714866"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=714865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=714865"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=714865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}