Shares of Broadcom plunged more than 12% in after-hours trading on Wednesday, wiping out over $300 billion in market value, after investors reacted negatively to the company's latest outlook despite strong quarterly earnings and surging artificial intelligence-related revenue.
The semiconductor giant reported record second-quarter revenue of $22.2 billion, up 48% from a year earlier, while adjusted earnings per share climbed 54% to $2.44, exceeding analysts' expectations. Revenue from AI semiconductor products also jumped 143% year-over-year, highlighting the company's growing role in the rapidly expanding artificial intelligence market.
However, the strong financial performance failed to satisfy investors who had anticipated a more aggressive upgrade to Broadcom's long-term growth projections.
The company's shares had closed Wednesday's regular trading session at a record high of $495 before tumbling sharply in extended trading.
Chief Executive Officer Hock Tan said demand for artificial intelligence infrastructure remains exceptionally strong and described customer appetite for AI technology as "simply insatiable."
Broadcom projected third-quarter revenue of $29.4 billion, representing annual growth of approximately 84%, and raised its full-year AI semiconductor revenue forecast to $56 billion. The updated figure would mark a roughly 180% increase compared with the previous fiscal year.
Despite the upgraded forecast, investors appeared disappointed that the company did not significantly increase its longer-term AI sales targets, which many analysts had expected following months of strong demand across the sector.
The market reaction quickly spread beyond Broadcom, triggering declines in technology and semiconductor stocks across Asia on Thursday.
The regional sell-off interrupted a four-day rally in Asian equities, with investors reassessing expectations for companies linked to the artificial intelligence boom.
In South Korea, shares of Samsung Electronics and SK Hynix fell between 2% and 4%, while LG Electronics dropped nearly 14%.
Taiwanese technology firms also came under pressure, with Hon Hai Precision Industry and Wistron posting notable losses as investors digested Broadcom's guidance.
Broadcom remains one of the most important suppliers in the global AI supply chain, providing custom artificial intelligence accelerators and networking chips to major technology companies including Google, Meta, and OpenAI.
As a result, the company's earnings and forecasts are widely viewed as indicators of broader spending trends within the AI industry.
The sharp decline underscores the increasingly high expectations facing companies at the center of the artificial intelligence boom, where strong earnings growth alone is no longer enough to satisfy investors seeking signs of sustained acceleration in demand.
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