Broadcom’s AI Growth Fails to Impress as Margins Weigh on Stock
Broadcom shares tumbled 10% intraday despite forecasting a doubling of AI revenue to $8.2 billion this quarter. The chipmaker's margin contraction—attributed to higher AI product mix—triggered investor skepticism about profitability in the sector.
Wall Street's cooling sentiment reflects broader concerns about AI overspending. While tech stocks have ridden AI Optimism to record highs, recent earnings scrutiny shows growing risk aversion. "The market wants growth, but not at any cost," observed one trader as semiconductor stocks faced pressure.
The divergence between Broadcom's booming AI chip sales and its stock performance underscores a pivotal moment for tech valuations. Investors are increasingly demanding clear paths to profitability rather than pure revenue growth—a shift that could reshape capital flows across emerging technologies.
