By Khac Phu Nguyen
Publication Date: 2026-08-18 18:54:00
This article first appeared on GuruFocus.
Broadcom (NASDAQ:AVGO), the semiconductor and infrastructure-software giant, dropped approximately 3.4% to $379.15 Tuesday morning as investors hit the brakes on crowded artificial-intelligence trades. The selloff was not about weaker execution. It was about valuation pressure as higher bond yields forced investors to rethink how much they are willing to pay for future AI growth.
Broadcom’s business remains on fire. The company’s fiscal second-quarter revenue surged 48% to $22.19 billion, while AI semiconductor revenue more than doubled, jumping 143% to $10.8 billion. Custom AI accelerators and networking products are becoming a massive growth engine, with AI chips now generating nearly half of Broadcom’s quarterly sales.
The opportunity is hugebut so is the expectation. Investors are no longer asking whether Broadcom can grow. They are asking whether it can grow fast enough to justify a premium…
