Broadcom’s AI-Revenue Guidance Miss Triggers Broadest Chip Sell-off in Weeks

Broadcom (AVGO) posted fiscal Q2 2026 revenue of $22.19 billion, a 48 % year-over-year increase, and non-GAAP earnings per share of $2.44 (up 54 %). AI-chip sales rose to $10.8 billion, a 143 % YoY surge. Despite beating headline forecasts, the company kept its FY 2027 AI-semiconductor target above $100 billion and guided Q3 AI revenue to ?$16 billion, short of the ?$17.2 billion Wall Street consensus. The stock fell 13 % on Thursday and a further 8 % on Friday, erasing roughly $286 billion in market value and pushing the price-to-earnings multiple to about 64×.

ARM and Intel lead AI chip rout as Broadcom guidance miss and jobs beat deepen two-day selloff, SOXX -10.4%

Management highlighted “insatiable” demand for its custom XPUs and networking silicon, while noting that AI revenue now accounts for a growing share of the business. The firm reaffirmed its FY 2027 AI target but did not raise the figure, a stance that investors interpreted as a guidance miss. Analyst consensus had expected a higher near-term growth rate, and the lack of a new catalyst amplified concerns about valuation and growth sustainability.

NVIDIA Is Not the Only AI Chip Winner: Broadcom Forecasts $56 Billion as Custom Silicon Demand Surges

Broadcom’s disappointment sparked a broad rotation out of AI-linked equities. In the United States, the Philadelphia Semiconductor Index (SOX) slipped 2 % after falling as much as 6.3 %. Asian markets mirrored the move: Samsung Electronics down 7 %, SK Hynix down 8 %, Tokyo Electron and Advantest each losing over 6 %. The sector-wide pullback dragged the VanEck Semiconductor ETF lower than 1 %, and high-growth names such as AMD, Intel, Nvidia, Arm, and Marvell all posted double-digit declines.

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Broadcom CEO Hock Tan emphasized continued “insatiable” demand for XPUs and networking while maintaining a conservative outlook on FY 2027 AI revenue. Jefferies analyst Blayne Curtis raised his price target to $550, citing long-term margin expansion despite short-term guidance. Mizuho’s Vijay Rakesh lifted his target to $530, noting that the $100 billion FY 2027 figure should be viewed as a floor, not a ceiling. Conversely, some analysts warned that the company’s reliance on a handful of hyperscale customers could magnify revenue volatility.

ARM and Intel lead AI chip rout as Broadcom guidance miss and jobs beat deepen two-day selloff, SOXX -10.4%

Investors flagged the high valuation—a P/E near 64×—as a risk factor, arguing that any modest miss could trigger outsized price swings. The AI segment’s growth is heavily weighted toward a few large customers; a delay or diversification by any of them could materially affect future results. The guidance shortfall also raised doubts about the durability of the AI-infrastructure boom amid a tightening monetary environment.

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TechTimes reported a management outlook of ?$56 billion in AI semiconductor revenue for FY 2026, while other sources only disclosed Q3 guidance of $16 billion and a FY 2027 target of >$100 billion. No firm-wide, contracted numbers were provided, leaving the exact scale of the AI business ambiguous.

NVIDIA Is Not the Only AI Chip Winner: Broadcom Forecasts $56 Billion as Custom Silicon Demand Surges

Broadcom’s role as a bellwether means its guidance shapes market sentiment for the entire chip sector. The sell-off illustrates how valuation-driven expectations can outweigh solid earnings, especially when growth hinges on a narrow set of customers and macro-economic factors such as potential interest-rate hikes.

Intel, AMD stocks slide again in aftermath of Broadcom's weak outlook

South-Korea’s Kospi fell 5.5 %, led by Samsung and SK Hynix declines. Japan’s tech index saw Tokyo Electron and Advantest each drop over 6 %, while Taiwan’s TSMC bucked the trend, edging 0.4 % higher.

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Broadcom will release Q3 results in early July, with guidance for full-year AI revenue under close analyst scrutiny. Market participants will monitor any updates on customer contracts—particularly with Google, OpenAI, and Meta—and watch for further valuation adjustments across the semiconductor space.

NVIDIA Is Not the Only AI Chip Winner: Broadcom Forecasts $56 Billion as Custom Silicon Demand Surges