Why Broadcom (AVGO) Stock Is Trading Lower Today

Broadcom (NASDAQ:AVGO), a fabless chip and software maker, fell 3.9% in afternoon trading after competitor Marvell Technology announced an agreement with Alphabet’s Google to develop custom artificial intelligence chips. The joint statement raised concerns about Broadcom’s future share with a major AI customer and its role as the incumbent custom-silicon partner for Google’s Tensor Processing Unit ecosystem. TradingKey reported anxiety about long-term market-share retention. Shares traded at $364.52, down 4.1% from the previous close. Broadcom has made 19 moves greater than 5% over the past year, so the decline is meaningful but does not necessarily indicate a fundamental change in market perception. Its largest recent move was a 14.3% drop three months ago after underwhelming Q2 FY2026 results, when investors focused on the valuation-driving figure and management’s decision not to raise its long-term target. The underlying quarter was strong. Q2 revenue reached a record $22.19 billion, up 48% year over year. AI semiconductor revenue surged 143% to $10.8 billion, slightly above prior guidance of $10.7 billion. Non-GAAP EPS of $2.44 exceeded the $2.40 consensus. Free cash flow reached a record $10.3 billion, or 46% of revenue, while EBITDA margin reached a record 69%. Broadcom guided Q3 revenue to $29.4 billion, above the $28.53 billion consensus and implying 84% year-over-year growth. It forecast Q3 AI semiconductor revenue of $16 billion, more than 200% above the prior year but about $1.2 billion below analysts’ models. CEO Hock Tan reiterated the FY2027 AI semiconductor revenue target of “in excess of $100 billion,” rather than raising it. Tan identified six hyperscaler customers, including Anthropic, Google, Meta and OpenAI, and announced an AI compute platform with Apollo and Blackstone targeting 20 gigawatts of capacity by 2028. The Marvell agreement therefore introduces a competitive risk, but Broadcom retains substantial growth catalysts. The stock is up 4.9% year to date but remains 24.3% below its 52-week high of $481.57 from June 2026. A $1,000 investment made five years ago would now be worth $7,698.