Why Broadcom Stock Is Plummeting Today

Core Insights - Broadcom's stock is experiencing a significant decline despite strong sales and earnings performance, with a drop of 11.7% in a single trading session [1][6] - The company reported fourth-quarter results that exceeded Wall Street expectations, but negative investor sentiment is growing due to concerns over other performance indicators [2][4] Financial Performance - In the fourth quarter, Broadcom achieved non-GAAP earnings per share of $1.95 on revenue of $18.02 billion, surpassing analyst estimates of $1.89 per share on revenue of $17.46 billion [4] - Revenue for the quarter surged approximately 28% year-over-year, driven by robust demand for AI infrastructure products, with AI category revenue increasing by 65% to reach $20 billion [5] Future Guidance - For the current quarter, Broadcom provided a sales guidance of $19.1 billion, which is above the average analyst estimate of $18.31 billion [7] - Despite the positive sales outlook, concerns have arisen regarding potential margin pressure, with management anticipating a gross margin decline of about 100 basis points sequentially, attributed to a higher mix of AI revenue [8]