New York, June 4, 2026, 04:10 (EDT)
- Broadcom shares were down 11.2% in premarket trade after its fiscal second-quarter results.
- Chipmaker hit a new revenue record, but its AI-chip forecast fell short of what the market wanted.
- Nvidia and Marvell are still main markers for investors working through the custom-chip trade’s reprice.
Broadcom Inc. stock dropped premarket Thursday. The company’s AI outlook and its decision to keep its long-term goal steady disappointed some traders after the shares hit a record high earlier this week.
Broadcom shares were last showing $425.75 ahead of the bell, down 11.2% from their $479.23 finish Wednesday. Premarket trading runs before regular U.S. market hours. On MarketBeat, the stock sat at $413.67, off 13.7%, in late action at 8 p.m. Eastern, after earlier hitting $495.00 during the session.
Broadcom is in focus now as Wall Street looks to see if large cloud companies are still ready to pour money into custom AI accelerators. These are chips designed for a client’s machine-learning jobs, not just standard processors.
Broadcom posted a 48% jump in fiscal Q2 revenue, reaching $22.19 billion. Net income totaled $9.31 billion. Adjusted earnings landed at $2.44 per share. Free cash flow for the quarter was $10.26 billion. “The momentum continues,” CEO Hock Tan said. CFO Kirsten Spears cited “strong operating leverage.” Broadcom Inc.
Broadcom’s numbers disappointed investors. Revenue missed the $22.27 billion LSEG estimate, Reuters said. The company guided $16 billion in AI-chip revenue for the third quarter, falling short of the $16.36 billion analysts had expected, according to Visible Alpha. CEO Tan raised his 2027 AI chip shipment goal to over 10 gigawatts but did not raise Broadcom’s $100 billion chip sales target.
Ben Bajarin, chief executive at Creative Strategies, said of the long-term outlook: “Nothing slows down what was estimated prior — they just didn’t raise it.” Ryan Lee, senior vice president of product and strategy at Direxion, said the decision was a sign that “the market demands perfection.” Reuters
U.S. stocks ended lower, with the Dow off 1.21%, the S&P 500 down 0.74%, and the Nasdaq slipping 0.89%. Chip stocks gained 1.4%. Ross Mayfield, investment strategy analyst at Baird, said AI stocks seemed like they were “trading in their own completely separate world,” but that narrative was tested after Broadcom’s numbers came out post-close. Reuters
Nvidia’s GPUs are still most companies’ first choice for AI models, while Marvell Technology is betting big on custom chips, saying that business could bring in more than $10 billion by 2029. Broadcom is in between, with sales of custom silicon and networking gear for big cloud and AI clients.
Software helped a bit. Broadcom’s infrastructure software revenue climbed 9% to $7.18 billion and accounted for about a third of its quarterly total. But shares still traded with focus on AI chips, which now drive the company’s valuation moves.
But there’s obvious risk here. If cloud buyers hold off, change up chip plans, or if supply and trade pressure get worse than Broadcom expected, AI sales could miss the targets investors have put into the shares. Broadcom itself flagged risks like customer concentration, timing of demand, reliance on suppliers, trade issues and chip cycles.
Regular trading is up next. Broadcom’s results showed demand kept climbing, but for AI chip leaders, the stock response said even strong growth wasn’t enough.
