Inside Broadcom's $280 Billion Plunge: A Stellar Quarter, a Surprising U-Turn, and Wall Street's Demand for More

On the face of it, Broadcom just delivered one of its finest quarters ever. Revenue surged 48% to $22.2 billion, the AI chip business exploded 143% to $10.8 billion, and adjusted EBITDA hit $15.2 billion — a meaty 69% of sales. Free cash flow chipped in at a robust 46% of revenue. The kind of numbers most companies would kill for.

Yet the market’s response was anything but grateful. Broadcom shares cratered more than 12% in a single session, wiping out a staggering $280 billion in market value. The selloff dragged down the entire semiconductor sector. What went wrong? The answer lies less in what Broadcom achieved and more in what it refused to promise.

CEO Hock Tan acknowledged the record but declined to lift the long-standing target of over $100 billion in AI chip revenue for fiscal 2027. Investors who had been betting on an upgrade — and pricing the stock accordingly — were left empty-handed. That disappointment was compounded by a strategic pivot: Broadcom will now supply individual chips rather than fully integrated AI systems, effectively walking back a more ambitious vision that had excited the Street. The retreat landed especially hard given that gross margins slipped 230 basis points to 77.1%, squeezed by the growing mix of lower-margin AI chips.

The quarter also revealed a soft spot in a less flashy segment. Infrastructure software revenue of $7.18 billion narrowly missed consensus, adding to the sense that not every engine was firing at full throttle.

Should investors sell immediately? Or is it worth buying Broadcom?

Wall Street’s reaction was split. Within 24 hours, a wave of upgrades and target hikes poured in. Jefferies’ Blayne Curtis lifted his price target to $550, calling the drop a buying opportunity. JPMorgan raised to $580 and reaffirmed Broadcom as its top semiconductor pick. BNP Paribas Exane went even further, setting a target of $640. Mizuho, Deutsche Bank, Morgan Stanley, and Goldman Sachs followed with targets between $502 and $530. Erste Group upgraded from Hold to Buy, citing above-average growth relative to sector peers. The consensus among 47 analysts polled by S&P Global remains a "Strong Buy" with an average target of $511.

But not everyone was convinced. Macquarie downgraded the stock to Neutral, slashing its target to $437. The catalyst? A growing risk at one of Broadcom’s six core AI customers: Google. The search giant is increasingly shifting chip development to MediaTek, a move that could eat into Broadcom’s custom-chip revenue. That leak in the armor suggests even a seemingly unassailable AI order book — backlogged beyond $30 billion and visible through 2028 — may have weak spots.

Amid the chaos, a leadership change is imminent. On June 12, Amie Thuener will take over as CFO from Kirsten Spears, who is retiring after a dozen years at the company. Thuener arrives from Alphabet, where she served as Vice President and Chief Accounting Officer. Spears will stay on as a consultant for nine months.

Broadcom at a turning point? This analysis reveals what investors need to know now.

The stock closed the week at €336.75, about 10% above its 200-day moving average of €306.27 — a level that has held firm during the rout. The 52-week low of €213.80 sits far in the rearview mirror, while the all-time high of €429.60 set on earnings day June 3 remains a distant peak. On a year-to-date basis, shares are still up by a solid double-digit percentage, but the near-term trajectory depends entirely on whether Tan is ready to raise the bar when Broadcom reports third-quarter results on September 2, 2026.

For now, the underlying demand story remains intact. Broadcom’s six key hyperscale customers — including Google, Meta, and OpenAI — continue to order heavily. But the recent selloff made one thing painfully clear: in the AI chip race, even exponential growth is no longer enough to satisfy a market that always wants more.

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Broadcom Stock: New Analysis - 6 June

Fresh Broadcom information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

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