Broadcom AI Chip Revenue Forecast Miss

What happened: On Wednesday, Broadcom (AVGO) reported Q3 revenue of $22.19 billion, slightly surpassing estimates, but guided Q4 AI chip revenue to $16 billion, missing the $17.2 billion forecast. This news sent AVGO's stock down 14% and triggered a selloff in semiconductor and memory chip stocks.

Market impact: The miss in Broadcom's AI chip outlook sparked a broad selloff across tech and semiconductor sectors. Micron (MU) dropped 7%, while SanDisk and Western Digital fell 3% and 2% respectively. The disappointment also dragged down U.S. equity futures and caused Asian and European markets to open lower, with tech stocks underperforming.

What to watch next: Broadcom's Q4 earnings call on May 24 will provide more color on the AI chip demand slowdown. Additionally, upcoming earnings from other semiconductor companies like AMD, Intel, and Nvidia in the next two weeks will offer insights into the broader industry trends.