Broadcom shares sink 12% after missing revenue forecasts and disappointing AI growth expectations

Broadcom's stock fell about 12% in premarket trading on June 4 after the company missed quarterly revenue expectations. The chipmaker could lose more than $285 billion in market cap at the stock price of $418.83 if losses hold.

CEO Hock Tan nudged up shipment forecasts to more than 10 gigawatts of AI chips in 2027 and reiterated a long-term target of $100 billion in AI revenue, but did not raise these targets. TD Cowen analysts noted that reiterating previously ambitious targets without raising them disappointed investors expecting 'material beats and raises.'

AI semiconductor revenue rose 143% year-on-year to $10.8 billion in the quarter, though investors were dented by a downbeat outlook for third-quarter AI chip revenue, reinforcing concerns that growth may not be ramping as quickly as markets anticipated.

The stock trades at 29.90 times its forward earnings estimates, compared with Marvell Technology's 61.70 multiple and the broader S&P 500 index's 27.94.