Why Broadcom Stock Is Plummeting Today

Broadcom's AI sales are surging. So why is the stock getting crushed?Broadcom (AVGO 11.58%) stock is falling rapidly in Friday's daily trading session. The company's share price was down 11.7% as of 3 p.m. ET. After yesterday's market close, Broadcom published results for the fourth quarter of its last fiscal year -- a period that ended Nov. 2. The company posted sales and earnings for the period that topped Wall Street's expectations, but bearish momentum is surging in response to other performance indicators. Image source: Getty Images. Broadcom's quarterly beats weren't enough for investors Broadcom posted non-GAAP (adjusted) earnings per share of $1.95 on revenue of $18.02 billion in the first quarter. The performance came in meaningfully ahead of the average analyst estimate, which had called for adjusted earnings per share of $1.89 on revenue of $17.46 billion. Broadcom's revenue surged roughly 28% higher in fiscal Q4 and was boosted by strong demand for products used for artificial intelligence (AI) infrastructure. AI category revenue was up 65% year over year to reach $20 billion, and the company also announced that it was raising its quarterly dividend to $0.65 per share -- representing growth of 10%. ExpandNASDAQ: AVGOBroadcomToday's Change(-11.58%) $-47.05Current Price$359.32Key Data PointsMarket Cap$1.9TDay's Range$355.16 - $381.0052wk Range$138.10 - $414.61Volume4.5MAvg Vol23MGross Margin63.13%Dividend Yield0.58% Broadcom is sinking despite a sales guidance beat for fiscal Q1 In addition to performance beats in Q4, Broadcom's guidance for sales of $19.1 billion in the current quarter also topped the average analyst estimate's call for sales of $18.31 billion in the period. Despite the strong sales outlook, investors have been dumping the stock in response to guidance suggesting that the business could face margin pressure.Advertisement Management said it was anticipating the company's gross margin to fall roughly 100 basis points on a sequential quarterly basis. Even more concerning, the team attributed the decline to a higher mix of AI revenue. Investors had been modeling for higher revenue to mean higher gross margins, and they're selling the stock in response to news that likely won't be the case. About the AuthorKeith Noonan is a contributing writer at The Motley Fool covering technology, consumer goods, and other sectors. He holds a bachelor’s degree in English from Boston College.TMFNoonsRead NextDec 9, 2025 •By Anders BylundThis Growth Stock Continues to Crush the MarketDec 9, 2025 •By Parkev Tatevosian, CFAIs Broadcom Stock a Buying Opportunity for 2026?Dec 8, 2025 •By Rich SmithWhy Broadcom Stock Popped on MondayDec 8, 2025 •By Keithen DruryGot $5,000? 5 Top Growth Stocks to Buy That Could Double Your Money.Dec 6, 2025 •By Marc GubertiThe Secret to Finding the Next Broadcom Is Hiding in Plain SightDec 4, 2025 •By Geoffrey SeilerPrediction: This Will Be the Top-Performing Chip Stock in 2026