Broadcom stock sinks in after hours as AI chip forecast disappoints

June 4, 2026 - 04:43

Broadcom saw its stock drop sharply in after-hours trading Tuesday after the company released quarterly results that failed to meet lofty expectations for its artificial intelligence chip business. The semiconductor giant reported earnings that beat analyst estimates, but investors focused on a softer-than-anticipated outlook for AI-related revenue in the coming quarters.

The company's forecast for AI chip sales landed below the most optimistic Wall Street projections, raising concerns that the explosive growth in AI infrastructure spending might be cooling. Broadcom executives highlighted strong demand from cloud computing customers, but the guidance suggested that some large clients are pacing their orders more cautiously than before.

Shares fell more than 5 percent in extended trading, wiping out gains from earlier in the session. The decline reflects a broader pattern of volatility in AI chip stocks, where any sign of slowing momentum can trigger sharp selloffs. Broadcom has been a major beneficiary of the AI boom, with its networking and custom chip designs powering data centers for companies like Google and Meta.

Analysts noted that while the long-term AI opportunity remains intact, the market has grown impatient with any quarter that does not show accelerating growth. Broadcom's results also faced headwinds from a slowdown in its non-AI chip segments, including wireless and broadband components.

The company's CEO said demand for AI chips is still ramping up, but acknowledged that customer deployment timelines are shifting. Investors will now watch for updates from other chipmakers to see if this caution is an industry-wide trend or specific to Broadcom.