Broadcom (AVGO) shares fell 3.21% as tech sector profit-taking and market rotation drive decline

Broadcom (NASDAQ: AVGO) shares fell 3.2082% in pre-market trading on January 9, 2026, as broader market rotation out of technology stocks pressured the semiconductor giant. The decline aligned with a sector-wide pullback, driven by profit-taking in high-growth tech equities following a recent rally.

Analysts noted the selloff reflected shifting investor sentiment toward defense and industrial sectors amid President Trump’s proposed $1.5 trillion 2027 defense budget, which boosted defense contractors like Northrop Grumman and Lockheed Martin. Energy market stabilization and oil price rebounds further supported capital reallocation away from tech. Broadcom’s stock, however, remained underpinned by strong AI semiconductor demand, with analysts like Truist Securities and UBS recently upgrading price targets amid a $73 billion AI backlog and expanding infrastructure opportunities.

Short-term concerns lingered over margin pressures and customer dynamics, particularly as some hyperscalers explore in-house chip designs. Despite the decline, Broadcom’s long-term AI growth trajectory remains intact, with institutional investors maintaining bullish positions. The stock’s volatility—marked by 23 moves exceeding 5% in the past year—underscores its sensitivity to macroeconomic shifts and sector rotations.

The broader trend of capital outflows from tech stocks has also impacted valuation multiples, with price-to-earnings ratios for semiconductor firms compressing by 15–20% over the past two quarters. Analysts remain divided, with some advocating for a strategic reentry into tech, while others suggest waiting for a clearer macroeconomic signal before committing capital.