Broadcom stock drops 15% after record AI quarter

Broadcom fell about 15% in U.S. trading after the company reported second-quarter results on June 3, 2026. Revenue was $22.187 billion, up 48% year‑over‑year. AI semiconductor revenue reached $10.8 billion, a 143% increase. Adjusted earnings per share were $2.44, up 54% year‑over‑year. Semiconductor Solutions sales were $15.009 billion. Bookings exceeded $30 billion while shipments totaled $10.8 billion for the quarter. Management guided third‑quarter revenue to about $29.4 billion, projected full‑year 2026 AI revenue near $56 billion and reiterated a target of more than $100 billion in AI revenue for 2027. Infrastructure software revenue rose to $7.2 billion and annual recurring revenue increased about 17%.

Several company metrics showed changes that investors tracked. GAAP earnings per share have varied across recent quarters, reflecting acquisition-related charges in 2024 and a share count that increased from roughly 4.63 billion to 4.74 billion. Gross margin was 77.1% for the quarter, down 230 basis points from a year earlier. Management guided gross margin toward about 74% for the next quarter and said the mix of custom AI chips, which carry lower margins than legacy chips and software, affects the blended margin as AI sales grow.

Trading indicators showed shifting demand ahead of and after the report. The Chaikin Money Flow, a measure of buying and selling pressure, fell from about 0.5 in early May to about 0.11 by the earnings release. From roughly May 14 to June 2 the stock price trended higher while the money‑flow indicator declined; sell volume in that period approached 50 million shares. Options market data showed a put‑call open‑interest ratio near 1.12 before the results and about 1.09 afterward, while the put‑call volume ratio rose from 0.51 to 0.54 on increased put buying.

Positions in crypto‑listed perpetual contracts reflected a bearish tilt among some active traders. On one derivatives platform, the smart‑money cohort was net short Broadcom by about $1.06 million with no long exposure. Larger whale wallets showed a net short lean of about $4 million, split roughly $2.63 million short versus $1.36 million long. One large trader held sizable longs in the S&P 500 and Nvidia but only a small Broadcom long, opened near $409 and worth about $25,000. These synthetic positions do not move listed shares but mirror sentiment among certain traders.

Analysts raised price targets following the results; one firm lifted its target to $650 from $550 and other firms issued higher marks. Before the selloff, Broadcom shares had gained about 38% year‑to‑date and roughly 70% since late March. The stock declined following the earnings release despite the revenue record, heavy AI bookings and raised analyst targets.