Macquarie downgraded Broadcom (AVGO) from Outperform to Neutral following its fiscal second-quarter earnings report. The firm cut its price target for the stock to $437 from $513.
Analysts cite Google’s strategic shift toward internal chip development as the primary driver for the downgrade. This move to insource chips could lead to a meaningful decline in Broadcom's market share by 2027.
Broadcom shares fell more than 12% despite the company reporting strong second-quarter results. AI semiconductor revenue surged 143% year-over-year to reach $10.8 billion. Investor disappointment grew as management reiterated rather than raised its long-term AI revenue forecast.