Broadcom slump lifts inverse ETF, crushes 2x bull

Broadcom shares fell 12.59% on June 4 after the company reported quarterly results that met expectations but did not include a positive update on demand for AI semiconductors. The decline erased roughly $286 billion in market value. The Direxion Daily AVGO Bear 1X Shares (AVS), an inverse ETF that gains when Broadcom falls, rose about 12.36%. The Direxion Daily AVGO Bull 2X (AVL), which seeks twice Broadcom’s daily performance, tumbled on the single-day drop.

Macquarie downgraded Broadcom and cut its price target, noting the company’s position in AI application-specific integrated circuits faces new competitive pressure. The firm pointed to Google’s work with MediaTek and expanding internal chip development and projected Broadcom’s market share could decline significantly in 2027–28.

Morningstar analyst William Kerwin wrote that Broadcom is guiding conservatively and described the company’s fiscal 2027 revenue target as a sandbag. He highlighted management expects capacity to ship 10 gigawatts of compute in 2027 and estimated Broadcom could earn well above $10 billion per gigawatt. Kerwin raised Morningstar’s fair value estimate for Broadcom to $650 from $550 and listed the company among the firm’s top semiconductor picks.

The market reaction underscored differences in risk between inverse, non‑levered ETFs and leveraged single‑stock ETFs. AVS’s gain nearly mirrored Broadcom’s drop, while AVL amplified the loss and logged larger intraday declines.

June 4’s volatility prompted swift price‑target revisions and large intraday flows into ETFs positioned for both directions of Broadcom’s shares. Broadcom’s guidance included a $100 billion fiscal 2027 revenue goal alongside the 10‑gigawatt capacity figure.