Key Takeaways
Broadcom shares sank Friday despite quarterly earnings that topped analysts’ estimates on strong AI demand.Other AI hardware stocks sank along with Broadcom, extending losses Thursday amid worries about an AI bubble.

Broadcom (AVGO) led AI hardware stocks lower Friday, extending Thursday’s tech rout despite a stronger-than-expected earnings report from the chipmaker. 

Shares of Broadcom were down nearly 9% in recent trading, leading decliners on the S&P 500 and Nasdaq. AI investor favorites Advanced Micro Devices (AMD), Micron Technology (MU), and Palantir (PLTR) also lost ground, as worries about an AI bubble continued to weigh on exposed stocks in the tech sector.

Broadcom late Thursday reported adjusted earnings per share of $1.95 on a record $18.02 billion in revenue for its fiscal fourth quarter as demand for its AI chips surged. Both figures topped analysts’ estimates, but they weren’t enough to sway growing investor skepticism around the AI trade.

Why This Matters to Investors

The AI boom has driven much of the stock market’s growth in the last few years, but many AI stocks have taken a hit lately amid worries about a brewing bubble. Broadcom’s drop Friday—even after a strong earnings print—could be taken as a signal of flagging support for the sector.

For some AI bulls, Friday’s pullback could look like an opportunity to buy the dip, however.

William Blair analysts told clients following Broadcom’s report that they “continue to see a favorable risk/reward equation for the stock on the back of sustained AI demand,” and called Broadcom as a “leading alternative” to AI chip leader Nvidia (NVDA).

While analysts’ ratings are still in flux, most on Wall Street remain bullish about Broadcom. All of the 12 analysts with current ratings tracked by Visible Alpha have said they consider it a “buy” with room to rise. Even with Friday’s losses, the stock is up close to 60% for 2025.