Broadcom Follows Oracle in Letting Down AI-Focused Investors

Core Insights - Broadcom Inc. experienced its largest stock decline in over 10 months, with an 11% drop in New York trading, following a disappointing sales outlook for the AI market [1][2] - CEO Hock Tan mentioned a backlog of $73 billion in AI product orders to be shipped over the next six quarters, but this figure did not meet investor expectations [2][4] - The company refrained from providing a specific annual AI revenue forecast, citing the uncertainty of future orders and narrowing profit margins [4] Company Performance - Broadcom's stock fell 11% after the conference call, marking the biggest single-day drop since late January [2] - The company reported expected sales of approximately $19.1 billion for the fiscal first quarter, surpassing analysts' average estimate of $18.5 billion [4] - Broadcom increased its quarterly dividend by 10% to 65 cents per share [4] Market Context - The disappointing outlook from Broadcom followed a similar report from Oracle Corp., which also faced investor concerns regarding AI prospects due to increased spending on data centers [3] - Oracle's stock also fell 11% after pushing back completion dates for data centers being developed for OpenAI [3]