Broadcom Shares Plummet 10% After Sales Forecast Falls Short

Core Viewpoint - Broadcom's shares fell over 10% despite reporting better-than-expected quarterly revenue and earnings, primarily due to a disappointing outlook for AI sales provided by CEO Hock Tan [1][2]. Financial Performance - Broadcom reported quarterly earnings per share of $6.82 and revenue of $63.8 billion, exceeding economists' estimates of $6.75 and $63.4 billion respectively [2]. - The company's market value decreased by approximately $200 billion, dropping from $1.9 trillion to just over $1.7 trillion [4]. Market Reaction - Shares of Broadcom declined by 10.5% to around $363.70, marking the largest single-day drop since a 17.4% decline in January [2]. - The decline in Broadcom's stock contributed to broader losses across the tech-heavy Nasdaq, affecting other major companies such as AMD, Palantir, Amazon, Intel, Alphabet, Meta, Nvidia, and Microsoft [3]. AI Sales Outlook - CEO Hock Tan mentioned a backlog of $73 billion in AI product orders expected to be shipped over the next 18 months, which analysts questioned regarding its accuracy [3]. - Tan clarified that the $73 billion backlog was a minimum expected revenue and expressed optimism about continued sales growth [3]. Competitive Position - Despite the recent decline, Broadcom's stock has risen 57% this year, outperforming Nvidia's 30.2% increase [4]. - Broadcom remains the sixth-largest company globally, ahead of Meta and behind Amazon [4].