By David Jagielski, CPA
Publication Date: 2026-06-04 18:29:00
Shares of tech giant Broadcom (AVGO 7.49%) were in a free fall on Thursday after the company posted its latest earnings numbers. The stock was down around 16% at one point in the morning.
What may seem puzzling is that the company, which has been experiencing a surge in demand due to artificial intelligence (AI), generated strong earnings, and its growth looked terrific in its most recent quarter. However, this sell-off serves as a cautionary tale for AI investors who believe that stocks will just continue rising higher and that valuations don’t matter.
Image source: Getty Images.
Why did Broadcom’s stock crash?
On Wednesday, Broadcom reported its latest earnings numbers for the second quarter of Fiscal 2026. Its revenue totaled $22.19 billion for the period ending May 3, which was an impressive increase of 48% year over year. But that came in slightly below expectations of $22.27 billion. Its adjusted earnings per share of $2.44 did, however, come in higher than Wall Street…
