Why Broadcom Stock Fell 15% in June

Shares of Broadcom (AVGO +5.00%) were among the losers last month, tumbling after its second-quarter earnings at the beginning of June despite solid results. The company's AI revenue, while strong, fell short of estimates, and management acknowledged that Google, a major customer, was diversifying its sourcing for custom chips, or ASICs. As a result, the stock finished the month down 15%, according to S&P Global Market Intelligence. As you can see from the chart below, the stock fell sharply after the report and then stayed down. AVGO data by YCharts What happened with Broadcom Broadcom has been one of the biggest winners in the AI boom, and it may be the least-known trillion-dollar company in the country, with a valuation of nearly $2 trillion. However, concerns about stretched valuations and overspending on AI infrastructure are starting to weigh on semiconductor stocks like Broadcom, and that was evident following its earnings report. In the second quarter, Broadcom's revenue grew 48% to $22.2 billion, and adjusted earnings per share increased from $1.58 to $2.44. Both results slightly beat expectations. Broadcom also said that semiconductor revenue from AI grew 143% to $10.8 billion, which was better than the company's forecast. It also said that AI-related revenue would triple in the third quarter to $16 billion, but that was slightly below expectations of around $17 billion. Investors also seemed disappointed that the company didn't raise its long-term AI chip guidance as it continued to call for at least $100 billion in sales in fiscal 2027. ExpandNASDAQ: AVGOBroadcomToday's Change(5.00%) $18.53Current Price$389.31Key Data PointsMarket Cap$1.8TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Day's Range$376.89 - $395.0352wk Range$269.58 - $495.00Volume1.2MAvg Vol26.5MGross Margin65.66%Dividend Yield0.69% What's next for Broadcom Looking ahead to the third quarter, Broadcom expects around $29.4 billion in revenue, representing 84% growth from the quarter a year ago, and it forecast $19.6 billion in adjusted operating income. The business is clearly executing effectively, but the stock surged so much in recent years that high expectations have been baked into the stock, though it now looks reasonable at a forward P/E of 33.5. Considering its growth rate, that seems like a fair price to pay, but the market may need to see more evidence that its growth is sustainable. Broadcom seemed to deliver just that on Wednesday, it signed a $30 billion deal to make chips for Apple. The partnership will include a $1.5 billion investment from Apple to help Broadcom expand a Colorado manufacturing facility. Broadcom rose 5% on the news. Last month's pullback seems to offer a buying opportunity for Broadcom now, given the overall strength of the business. For AI investors, Broadcom's diversification makes it virtually a must-own stock. Read NextJul 8, 2026 •By Joe TenebrusoWhy Broadcom Stock Rose TodayJul 8, 2026 •By Dave KovaleskiBroadcom's AI Revenue Just Jumped 143%.

So Why Is the Stock Sliding?Jul 8, 2026 •By Keithen DruryNow Is the Perfect Buying Opportunity for Broadcom's Stock Amid an AI Sell-OffJul 7, 2026 •By Eric VolkmanWhy Broadcom Stock Dipped Into the red TodayJul 7, 2026 •By Lyle DalyThe Largest Technology Companies by Market Cap in July 2026Jul 6, 2026 •By Matt Frankel, CFP®S&P 500 Explained: How the Index Works and How to Invest in ItAbout the AuthorJeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011.

Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.TMFHoboX@TMFBowmanStocks MentionedBroadcomNASDAQ: AVGO$389.31(+5.00%)+$18.53Motley Fool Stock Advisor’s Latest PickGet Access---% Avg ReturnAppleNASDAQ: AAPL$313.39(+0.88%)+$2.73*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.