Broadcom Plunge Pulls Down Micron, AMD and Chip Sector

Broadcom plunged 15% on Thursday after its fiscal third-quarter guidance for AI semiconductor revenue came in about $400 million below market expectations, triggering losses across the chip sector. The company’s outlook remained above Wall Street consensus but fell short of the higher forecasts investors had priced in.

Shares of Micron fell about 9.4%, Advanced Micro Devices lost more than 7%, Marvell dropped over 6%, SanDisk declined roughly 5%, Super Micro Computer slid about 4% and Intel fell more than 4%.

DA Davidson analyst Gil Luria described Broadcom’s guidance as likely reflecting conservative forecasting and shipment timing rather than weaker demand, adding that “the elevated expectations for Broadcom’s F2Q results were hard to live up to.”

Susquehanna analysts pointed to Broadcom’s shift to selling only chip solutions rather than broader rack systems and noted the company plans to stop selling racks to Anthropic in fiscal 2026. The firm also reported AI semiconductor bookings topped $30 billion during the quarter.

John Vinh of KeyBanc Capital Markets noted that repeated upward revisions to earnings forecasts had raised investor expectations and called Broadcom’s near-term pullback understandable in that context.

Raymond James analyst Karl Ackerman projected that DRAM and NAND average selling prices will peak in mid-calendar 2026 and begin recording sequential quarterly declines starting early next year.

On the supply side, Chinese memory producers ChangXin Memory Technologies and Yangtze Memory Technologies are ramping production capacity, which could add supply to the market. On the demand side, higher memory costs are weighing on device makers; Counterpoint Research projects about a 14% decline in global smartphone shipments this year.

Nine U.S. trade associations sent a joint letter to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick urging action to address ongoing memory-chip shortages. The letter warned that “while recent developments in AI offer the promise of generational technological advances and are important for US tech leadership, we must also ensure other key industries are not negatively impacted.”

Analysts at Susquehanna and Raymond James expect long-term supply agreements between chipmakers and customers to soften the impact of any price corrections. Raymond James maintained an Outperform rating on Micron.