Broadcom Stock Plummets Due to Downgraded Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 23 2026
0mins
Source: NASDAQ.COM
- Significant Revenue Growth: Broadcom's Q2 sales surged 48% year-over-year to a record $22.2 billion, with AI chip revenue skyrocketing 143% to $10.8 billion, indicating strong demand for AI accelerators and computing, yet the market reacted negatively.
- Stock Price Volatility: Following the Q2 earnings release, Broadcom's stock plummeted 21% from $481 on June 2 to $380 by June 23, primarily due to profit-taking by investors amid high valuations and increasing concerns over future margin compression.
- Guidance Downgrade: Broadcom anticipates a decline in gross margin to 74% in Q3, down from 77% in Q2, largely due to a higher proportion of lower-margin but rapidly growing AI chips, raising widespread market concerns despite significant revenue increases.
- Increased Valuation Appeal: Despite short-term pressures, Broadcom's five-year price-to-earnings-to-growth ratio stands at 0.68, indicating its potential as a value stock, while its forward P/E has dropped to a more attractive 32 from 37 a few months ago, potentially offering a buying opportunity for investors.
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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: 369.340
Low
370.00
Averages
457.75
High
525.00
Current: 369.340
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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See More
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