Broadcom Inc. shares fall 2% pre-market, currently trading at $323.68.

Broadcom Inc. shares fall 2% pre-market, currently trading at $323.68.

Broadcom Shares Decline Amid AI Export Uncertainty and Margin Concerns

Broadcom Inc. (NASDAQ: AVGO) shares fell 2% in pre-market trading on February 24, 2026, to $323.68, extending a year-to-date decline of 11.4%. The drop follows ongoing uncertainty surrounding U.S. export restrictions on high-end AI chips to China, which have disrupted supply chains and delayed customer orders. The U.S. government's extended review of export licenses for advanced AI hardware, including Nvidia's H200 chips, has created volatility for chipmakers reliant on Chinese demand according to market analysis.

The decline comes despite Broadcom's strong fiscal fourth-quarter results, where the company reported adjusted earnings of $1.95 per share and revenue of $18.02 billion, surpassing estimates. However, investors remained cautious after management warned of margin compression due to a higher mix of AI-related revenue, which requires significant upfront investment. CEO Hock Tan highlighted a $73 billion backlog expected to ship over 18 months but acknowledged near-term profitability risks.

Broadcom's valuation remains a focal point for analysts. The stock trades at a price-to-earnings ratio of 66.7x, above the U.S. semiconductor industry average. While some narratives suggest the stock is undervalued at current levels, with a fair value estimate of $480, others caution that margin pressures and geopolitical risks could limit growth. The company's annual revenue of $63.9 billion and net income of $23.1 billion underscore its scale, but recent volatility reflects sensitivity to macroeconomic and sector-specific headwinds.

The sell-off highlights broader challenges in the AI semiconductor sector, where companies face balancing innovation with profitability. Investors will likely monitor developments in U.S.-China trade dynamics and Broadcom's ability to navigate margin pressures as key drivers of future performance.