Broadcom AVGO Plunges 4.29% as AI Valuation Fears and Fed Caution Spur Tech Sector Selloff

On November 14, 2025, Broadcom (NASDAQ: AVGO) fell 4.29% in pre-market trading, reflecting broader tech sector declines amid rising skepticism over AI valuations and macroeconomic uncertainty. The stock joined a selloff affecting AI megacaps like Nvidia and Tesla, as investors rotated out of high-growth names amid fears of overvaluation and delayed inflation data from the U.S. government shutdown.

The decline was driven by three key factors. First, Federal Reserve officials signaled caution on rate cuts, with several policymakers warning inflation remains above target. This dimmed expectations for aggressive monetary easing, pressuring long-duration growth stocks. Second, AI sector concerns intensified as infrastructure bottlenecks—particularly electricity supply and data center readiness—spooked investors. Third, the government shutdown disrupted critical macroeconomic reports, creating uncertainty around inflation trends and delaying key data needed for Fed policy decisions.

Broadcom’s fundamentals remain strong, with recent VMware Cloud Foundation expansions and record AI-driven revenue growth. However, its valuation is highly sensitive to macro shifts, as evidenced by heavy institutional selling in the broader tech sector. While institutional investors have added to positions in AVGO through 13F filings, short-term traders are prioritizing risk-off moves amid AI "bubble" fears.

The selloff underscores the interplay between AI sector momentum and macroeconomic narratives. Broadcom’s exposure to AI infrastructure—both through semiconductors and cloud software—positions it for long-term growth, but near-term volatility is likely as markets digest inflation dynamics and energy constraints. The stock’s 4.3% decline mirrors broader tech losses, with the Nasdaq 100 dropping 2.2% on the day.