NEW YORK, Jan 29, 2026, 10:29 EST — Regular session
- Broadcom shares slipped roughly 2% in early trading, with chip ETFs and major rivals also slipping.
- Investors weigh Big Tech’s AI spending against the Fed’s decision to keep rates elevated for an extended period
- Apple’s earnings, due after the close, will be a key update for one of Broadcom’s biggest customers
Broadcom shares dropped 1.9% to $326.92 by 10:13 a.m. EST, following a close at $333.24 on Wednesday, as the semiconductor sector weakened. Nvidia slipped 1.3%, Marvell Technology declined around 4%, and two major chip ETFs fell close to 1.6%.
The decline unfolded amid a choppy start on Wall Street, where investors digested mega-cap earnings and guidance spotlighting AI spending once again. The Dow and S&P 500 nudged upward at the open, but the Nasdaq slipped. 1
Microsoft shares dropped 6.5% amid worries that its capital spending won’t yield enough returns. Meanwhile, Meta raised its revenue and capex forecasts for 2026, pushing its stock up 8% after hours. JPMorgan analysts noted these figures suggest “upward momentum for AI spending,” but investors remain divided on the value of that investment. 2
The Fed kept its key rate steady at 3.5% to 3.75% on Wednesday, with Chair Jerome Powell giving little indication on the timing of future cuts. Michael James, an equity sales trader at Rosenblatt Securities, summed it up: “Whether you were bullish or bearish … you walked away feeling about the same.” 3
Broadcom is riding the AI infrastructure wave, pushing custom ASICs—chips tailored for specific clients—and networking silicon that connects data center servers. Back in December, CEO Hock Tan flagged a $73 billion backlog set to ship over 18 months, projecting AI semiconductor revenue to double to $8.2 billion in the fiscal first quarter. CFO Kirsten Spears cautioned that gross margins might slip by roughly 100 basis points, or one percentage point, due to the heavier AI product mix. Summit Insights senior analyst Kinngai Chan pointed to customer concentration and thinner margins on AI system sales as major concerns. 4
Apple remains a major driver here. In 2023, it struck a multi-billion-dollar deal with Broadcom for U.S.-manufactured chips. Reuters noted that Apple made up roughly 20% of Broadcom’s revenue over its last two fiscal years. Bernstein analyst Stacy Rasgon called the deal a relief, saying it lifted an “overhang” off Broadcom. 5
Apple is pushing to cut its dependence on external suppliers. Bloomberg revealed the company aims to swap Broadcom’s Wi-Fi and Bluetooth chips for an internal design by 2025. Rasgon put the potential revenue loss at $1 billion to $1.5 billion but noted Broadcom’s radio-frequency components probably won’t be replaced anytime soon. 6
More broadly, AVGO continues to act as a barometer for AI sentiment. When doubts creep in about returns from data-center expansions, chip stocks often slide sharply, even if no new company news emerges.
Apple’s earnings drop after the close Thursday is the next big checkpoint. “Expectations are very high,” said Ameriprise chief market strategist Anthony Saglimbene. 7
