Broadcom AI outlook drags Intel, AMD in chip selloff

Broadcom’s cautious guidance on AI revenue triggered a semiconductor selloff Friday, with Intel shares sliding about 8% to an intraday low near $101.55 and AMD falling roughly 8%.

Broadcom reported fiscal second-quarter results that beat headline expectations but set third-quarter AI semiconductor revenue at about $16 billion, below analysts’ forecasts near $17.2 billion. The company did not raise its full-year AI chip revenue outlook. Broadcom shares fell more than 5% on Friday after a 13% drop the previous session. Thursday’s decline erased roughly $286 billion in market value, one of the largest single-day valuation losses for a U.S.-listed company.

The weakness spread across the sector. Micron Technology, Qualcomm, Arm Holdings and Marvell Technology also moved lower as investors weighed whether AI-driven demand will sustain recent gains in chip stocks.

Broadcom CEO Hock Tan indicated a major custom-chip customer, Google, was likely to diversify its supply chain, a comment that raised concern about changes in procurement by large cloud customers.

Intel faced additional pressure after Northland Capital Markets lowered its rating to Market Perform from Outperform. Analyst Gus Richard wrote that Intel’s nearly 500% rally over the past year had priced in much of the expected operational recovery and warned hyperscale data center spending could begin to slow in 2027.

AMD retreated as investors rotated out of high-growth AI names. Research firm Zacks downgraded AMD from “strong buy” to “hold”, citing a price-to-earnings ratio near 173 and a share price above the average analyst target. ARK Invest reduced its AMD position by about $39 million on June 3, and insider sales over the prior three months totaled more than $122 million. AMD shares remain up roughly 116% year-to-date but trade below their recent 52-week high.

Chipmakers had helped lift U.S. equities to record highs in recent months, supported in part by demand for specialized AI chips. Broadcom’s cautious forecast and comments on customer sourcing led investors to reassess near-term growth expectations for companies with the largest AI exposure.