Broadcom Stock Plummets 30% After Unfulfilled AI Chip Revenue Expectations

Broadcom Inc (AVGO) has seen its stock price drop by over 30% since June, erasing most of its year-to-date gains. The decline began after the company's Q2 FY2026 financial report revealed a significant increase in AI semiconductor revenue to $10.8 billion, up 143% from last year. However, management failed to raise their target of exceeding $100 billion in AI chip revenue by FY2027, which was seen as unfulfilled expectations.

The company's valuation also underwent a reset, with its P/E ratio now around 90x. This has led some investors to question whether the stock has hit rock bottom and may be due for a rebound. Broadcom is one of three key AI chip players alongside Nvidia (NVDA) and AMD (AMD), which have distinct business models.