Broadcom Inc's (NASDAQ:AVGO, XETRA:1YD) sharp after-hours slide, a drop of about 4.5%, wiping roughly $72 billion off its value, set the tone for a bruising session, as investors balked at the company’s latest outlook for AI-related sales.
The chipmaker, often bracketed with Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) in the race to supply high-end components for artificial intelligence systems, unnerved the market when chief executive Hock Tan offered a backlog figure that sounded underwhelming.
He told analysts the company has $73 billion in AI product orders scheduled for delivery over the next six quarters.
Although he stressed this was only a “minimum” and that more deals were expected, investors were hoping for firmer guidance, not least an AI revenue forecast for 2026, which Tan declined to give, calling it “a moving target”.
The stock’s reaction reflected the lofty expectations built into Broadcom’s 75% rally this year.
Tan highlighted an $11 billion order from Anthropic and said AI chip revenue should double to $8.2 billion in the current quarter, but warned that margins are tightening as AI sales grow.
The downbeat call overshadowed otherwise strong fourth-quarter numbers, including $18 billion in revenue and a dividend increase, and it left questions over when Broadcom’s AI bets will deliver the payoff investors want.