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Broadcom Stock Drops on AI Outlook: Did Nvidia and Oracle Just Set the Trap?

Broadcom just had its worst stock day in nearly a year—and the culprit was something investors were previously cheering: AI. On the surface, the company had a strong quarter. Revenue hit a record $18 billion, AI chip sales surged, and its infrastructure software business delivered steady growth. So why did the stock fall 11%? One word: expectations. The market had priced in a moonshot AI trajectory and Broadcom’s latest earnings call delivered a more earthbound message. While the company talked up its AI order backlog—$73 billion over the next 18 months—it also declined to give precise AI revenue forecasts, dodged questions on a mystery $1 billion customer, and hinted at tightening gross margins. For a stock trading at nosebleed multiples, that was enough to trigger a selloff. Let’s walk through what really happened and what it says about how Wall Street is valuing AI-driven semiconductor stocks.