Broadcom (AVGO) Sheds $280 Billion in Market Cap as AI Forecast Disappoints

On June 4, Broadcom Inc. (AVGO) shares plunged 12.6%, wiping out $280 billion in market value, even as the company reported better-than-expected quarterly earnings. The sell-off was triggered by an AI chip sales forecast that failed to match sky-high investor expectations fueled by the stock’s recent rally. The one-day loss ranks among the largest for a mega-cap firm since 2019, trailing only comparable shocks at Nvidia (NVDA), Microsoft (MSFT), and Apple (AAPL), and it dragged on the broader semiconductor sector. The decline highlights the vulnerability of AI-focused giants to even slight forecast misses. Historical data shows that in 39 instances since 2009 when Broadcom fell more than 6% in a single session, shares rebounded 80% of the time within one month, and after one year nearly all showed gains with a median return of 61%. Median bounce-backs were 8% and 20% over one and three months, respectively.