Broadcom Sinks 14% on Soft AI Chip Outlook Despite Earnings Beat, Dragging Down AMD and Intel

Shares of Broadcom (NASDAQ:AVGO | AVGO Price Prediction) are down 14% in Thursday morning trading, sinking to around $410 after closing Wednesday at $479.23. The reversal follows the company’s fiscal Q2 2026 earnings release after the close on June 3.

The pain is spreading. Advanced Micro Devices (NASDAQ:AMD) is off 4% to around $521, and Intel (NASDAQ:INTC) is down 3% to near $109, even though neither name has company-specific news today.

The setup matters. AVGO stock had been on a tear into the report, hitting fresh all-time highs and gaining 88% over the past year. That left the bar for results extremely high.

AI Guidance Disappoints Despite Earnings Beat

Broadcom actually beat expectations. Revenue came in at $22.19 billion versus the $22.13 billion consensus, and non-GAAP EPS hit $2.44 against $2.39 expected. AI semiconductor revenue grew 143% year over year (YoY) to $10.80 billion, topping the company’s own forecast.

Current-quarter total revenue guidance of $29.4 billion also came in above the $28.61 billion consensus. The problem sat in the AI line. Third-quarter AI chip sales were projected at $16 billion, below analysts’ estimates of $17.2 billion, and Broadcom didn’t raise its 2026 AI semiconductor sales forecast.

That combination triggered a textbook sell-the-news reaction. CFRA Research senior VP Angelo Zino captured it, stating, “The bar was really high going into the print here, and I think part of the response you’re seeing here from the shares kind of points to that.” Broadcom was also downgraded to Neutral with a $437 price target in a reported analyst note this morning.

AMD and Intel Caught in the Sympathy Wave

With no fresh catalysts of their own, Advanced Micro Devices and Intel are getting pulled into the AI chip pullback. Both have run hard. AMD stock is up 153% year to date (YTD) and 362% over the past year, leaving little cushion when sentiment turns.

Intel stock has been an even bigger mover. INTC shares are up 205% YTD and 456% over the past year on its foundry and AI inference traction. When the largest custom-silicon name signals a near-term AI ceiling, extended peers tend to wear the read-through.

Long-Term AI Story Still Intact

The bigger backdrop hasn’t changed. Hyperscaler AI spending this year is estimated to reach a whopping $650 billion.

CEO Hock Tan tried to reinforce the long runway on the call, declaring, “We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100 billion.” Broadcom also delivered $10.26 billion in free cash flow in the quarter, per its 8-K filing.

What to Watch

Investors can watch for whether Broadcom stock holds $410, and whether dip-buyers step in throughout the day. Sell-side notes through the morning could shape the next leg, especially around hyperscaler capex assumptions.

For AMD and Intel holders, the read-through question is whether AI chip sentiment stabilizes or whether more extended names see continued profit-taking. Careful investors may use today’s volatility to review their position sizing across the AI semiconductor complex rather than chase moves in either direction.