Broadcom Earnings Miss Drags Chipmakers Lower in Premarket

CNBC reported Thursday that U.S. semiconductor stocks plunged before the opening bell after Broadcom’s quarterly earnings fell short of Wall Street expectations.

Broadcom shares were the worst hit, sliding more than 15% in premarket trading. The company, which designs custom AI chips for major technology clients, posted results on Wednesday that failed to meet investor forecasts. The miss rattled the broader chip sector and pushed Nasdaq futures down roughly 1.4%.

A Sector-Wide Retreat Before the Opening Bell

The fallout spread quickly across the semiconductor space. Micron Technology dropped around 7%, while Marvell Technology shed approximately 7.5%. Intel and AMD each fell more than 4%, and Qualcomm declined close to 4%. S&P 500 futures also moved lower, off about 0.7% as equities markets felt the pressure.

The breadth of the decline underscored how tightly AI memory and custom chip narratives have been tied to recent market momentum. Analysts at HSBC, led by chief multi-asset strategist Max Kettner, flagged softening chip prices and a potential deceleration in AI spending as among their top concerns heading into the second half of the year.

Background: Chips Had Been Carrying the Rally

The semiconductor sector had been one of the strongest performers in equity markets over recent weeks. AI-related chip demand fueled repeated upward earnings revisions, drawing heavy institutional interest into names like Broadcom, Micron, and Marvell.

John Vinh, equity research analyst at Keybanc Capital Markets, told CNBC’s Squawk Box that the pullback was understandable given how far these stocks had run. He noted that market expectations had essentially caught up with the sector’s fundamentals. Vinh also flagged that Broadcom faces some pressure within its largest customer relationship, as Google has reportedly begun spreading chip procurement across multiple suppliers.

Despite the near-term turbulence, Vinh said he remains constructive on Broadcom’s longer-term outlook.

Strategists Urge Calm but Acknowledge the Pullback

Keith Lerner, CIO and chief market strategist at Truist Wealth, offered measured perspective on CNBC’s Closing Bell Wednesday evening. He argued that a pause after a strong run is a normal feature of healthy bull markets. Lerner described the underlying fundamentals as solid and suggested investors should expect occasional consolidation periods rather than smooth, uninterrupted gains.

The chipmaker retreat serves as a reminder that AI-driven enthusiasm, however well-founded, can produce valuations that outpace near-term earnings delivery. Thursday’s premarket moves suggest the market is recalibrating that gap.

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