Few artificial intelligence (AI) semiconductor stocks have had a better run than Broadcom (NASDAQ: AVGO) during this current bull market. The stock has posted an average annualized return of 67% over the past three years, which stacks up favorably with Nvidia, Intel, Advanced Micro Devices, and other leading chipmakers.
Broadcom stock dropped about 15% in the first quarter due to its high valuation and concerns about margin compression heading into the year.
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But since April, it spiked 55% to reach $481 per share on June 2, leading up to the second-quarter earnings release on June 3. But since then, the stock has plummeted 21% to $380 as of June 23.
Shares fell despite a strong earnings report that saw sales surge 48% year over year to a record $22.2 billion. Its AI chip revenue jumped 143% to $10.8 billion, driven by demand for AI accelerators and AI computing. That AI revenue is anticipated to rise 200% in the fiscal third quarter to $16 billion.