Wall Street Analyst: Broadcom’s Flat AI Guidance Justified the Selloff, but Nvidia Remains Best-in-Class Chip Play

Broadcom held the line on its AI guidance for its upcoming third quarter on Wednesday night, but the stock still fell 15% on Thursday morning. That counterintuitive outcome sits at the center of KeyBanc Capital Markets analyst John Vinh’s reaction on CNBC’s Squawk Box, where he defended his Overweight rating on Broadcom (NASDAQ:AVGO | AVGO Price Prediction) while reiterating that NVIDIA (NASDAQ:NVDA) remains the chip name to own.

Why Flat Guidance Tanked the Stock

Vinh’s first point: when a stock runs on a streak of beat-and-raise quarters, the unofficial bar moves well above the official guide. Broadcom’s Q2 was strong on the surface, with revenue of $22.187 billion (up 47.9% year over year) and AI semiconductor revenue of $10.80 billion, up 143% year over year. The Q3 AI guide called for $16.0 billion, over 200% YoY growth. But the full-year framing held steady.

As Vinh put it: “For Broadcom to come out and just reiterate its kind of AI outlook for not only fiscal 26, but also fiscal 27 of $100 billion. And not take it up is is probably not good enough. Just given where expectations are.”

The Two Real Headwinds

Vinh flagged two concrete reasons management may be guiding conservatively. First, supply chain bottlenecks outside Broadcom’s control: “management had talked about how dependencies on other supply chain constraints, such as you know, power grid, PowerShell, and other supply…