Why Did Broadcom Stock Drop 3.7% Despite Strong Earnings?

Before the BellFriday, Jun 6, 2025 4:23 am ET
1min read

On June 6, 2025, Broadcom's stock experienced a 3.7% drop in pre-market trading.

Broadcom, a key player in the AI hardware ecosystem, reported its second-quarter earnings for the fiscal year 2025. The company's revenue for the quarter was $150 billion, slightly above the analyst consensus of $149.6 billion. The adjusted earnings per share were $1.58, exceeding the expected $1.56. The company's net income for the quarter was $49.7 billion, more than double the $21.2 billion reported in the same period last year.

Broadcom's CEO, Hock Tan, highlighted the company's progress in AI semiconductor revenue, which grew by 46% year-over-year to $44 billion. This growth was driven by increased demand for network chips like the Tomahawk 6 series, which connect large AI accelerator clusters. Tan also noted that the company's AI semiconductor revenue is expected to grow to $51 billion in the third quarter, driven by continued investment from major partners.

Despite the strong financial performance, Broadcom's stock price declined in after-hours trading. This drop can be attributed to the high expectations set by the company's recent stock performance and the lack of significant surprises in the earnings report. Investors may have been looking for more substantial growth or innovative developments to justify the stock's recent gains.

Ask Aime: Why did Broadcom's stock drop 3.7% in pre-market trading?