Market Reaction to Tech Stock Pullback
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 05 2026
0mins
Source: CNBC
- Market Pullback Analysis: Esteemed finance professor Jeremy Siegel noted that the sell-off in tech stocks is a common reaction to rapid price increases, with the Nasdaq declining 4.7% this week yet still up 10.6% year-to-date in 2026, highlighting the tension between short-term volatility and long-term growth potential.
- Semiconductor Sector Performance: Siegel pointed out that semiconductor stocks have performed well in 2026, with the VanEck Semiconductor ETF rising 58% year-to-date, but faced a nearly 5% drop this week, indicating high volatility within the sector and fragile investor sentiment.
- AI-Driven Market Changes: Siegel believes that the current AI-driven market growth is different from past bubbles due to its potential for productivity enhancement, likening its societal impacts to the Industrial Revolution, emphasizing the uniqueness and potential of this technological transformation.
- Profitability Sustainability Warning: He cautioned that rapid price increases only make sense if companies can sustain their earnings; if profitability fluctuates significantly in the short term, it could lead to over-speculation in semiconductor stocks, increasing market risk.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 392.900
Low
370.00
Averages
457.75
High
525.00
Current: 392.900
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Increased Customer Demand: As the AI market expands, Broadcom's hyperscale customers are expected to ramp up chip purchases, reducing infrastructure costs and long-term dependence on Nvidia by installing more custom ASICs, thereby further solidifying their market position.
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- Diverse Product Portfolio: Broadcom also sells a wide range of non-AI chips and infrastructure software, which, although growing slower, allows the company to bundle products, lock in customers, and expand competitive advantages across multiple markets, enhancing its market moat.
See More
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- Increased Customer Demand: As the AI market expands, Broadcom's hyperscale customers are expected to ramp up chip purchases, reducing infrastructure costs by installing more custom ASICs, thereby decreasing long-term dependence on Nvidia and enhancing competitive positioning.
- Significant Investment Value: Analysts forecast Broadcom's revenue and EPS to grow at CAGRs of 53% and 66% from fiscal 2025 to 2028, respectively, while trading at just 25 times next year's earnings, highlighting its undervaluation relative to growth, making it one of the cheapest mega-cap AI stocks in the market.
- Diverse Product Portfolio: Although Broadcom's non-AI chip business is growing more slowly, its extensive product range across mobile, data center, and networking sectors allows for bundling, locking in customers and widening its competitive moat across multiple markets.
See More
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