Despite delivering a record-breaking financial report, American chip giant Broadcom saw its stock price plunge 15% in after-hours trading, a classic case of "buy the rumor, sell the news."

After the market closed on June 3, Eastern Time, Broadcom released its fiscal 2026 second-quarter results. The data showed company revenue reached $22.19 billion, a 48% year-over-year increase, setting a new historical high; adjusted earnings per share were $2.44, surpassing the market expectation of $2.40. The highly-watched AI semiconductor business performed particularly strongly, with revenue soaring to $10.8 billion, a 143% surge year-over-year, becoming the core engine of growth.

However, the impressive figures failed to prevent a stock price "dive." Broadcom's total revenue for the quarter was slightly below analysts' expectations of $22.27 billion, while its infrastructure software business revenue of $7.18 billion also missed the $7.32 billion forecast.

But the real trigger for the market sell-off was management's cautious outlook on future performance. Although Broadcom expects total revenue for the third fiscal quarter to reach $29.4 billion, exceeding expectations, its core AI chip revenue guidance of $16 billion fell short of some analysts' projections of $17.2 billion. More disappointing for investors was that CEO Hock Tan did not raise the full-year AI chip revenue target as the market had hoped, instead reiterating the original guidance of "more than $100 billion."

Market analysis points out that Broadcom's stock price has already risen nearly 40% year-to-date, with valuations at elevated levels, and investors held extremely high expectations for its performance. Therefore, even with an overall strong earnings report, any minor flaw or lack of an "explosive" upward revision in guidance became a catalyst for profit-taking. Furthermore, management indicated that the AI networking business's revenue share might decline from 40% to around 30% in the future, intensifying market concerns about the sustainability of growth.

As a result, Broadcom's after-hours stock price tumbled over 15% at one point, dragging down other chip stocks in after-hours trading.