Broadcom Tumbles Over 20% Amid Tariff Concerns Despite Strong Financial Performance

On April 3, Broadcom (AVGO) experienced a significant decline, dropping 10.51%, marking the lowest intraday price since September 2024. This downward trend continued on April 4, with a 10.07% decrease by mid-afternoon.
Broadcom, a global leader in semiconductor and infrastructure software solutions, reported impressive financial results as of February 2, 2025, with a total revenue of $149.16 billion, a 24.71% increase year-over-year. The company also saw a substantial rise in net profit, reaching $55.03 billion, up by 315.32% from the previous year. Broadcom's extensive product portfolio includes services for critical markets like data centers, networking, software, broadband, wireless, storage, and industrial sectors.
The recent tariff policy announced by President Trump has stirred significant concern in the global economic sphere, particularly impacting the technology sector. Broadcom, along with companies like Micron Technology and ON Semiconductor, has been identified as one of the enterprises facing high risk from these tariffs. Analysts point out that companies with substantial profit margins, such as Broadcom, may face risks associated with compressing price-to-earnings ratios due to these policies.
Despite semiconductors being exempt from the tariff list, the intricate nature of these policies and the extensive semiconductor supply chain make it challenging to fully assess their impact. Analysts caution that if the tariffs lead to an economic downturn, semiconductor stocks, including Broadcom, might suffer significant price drops. They further suggest that prolonged tariff policies could freeze supply chains, dramatically decreasing order rates and inventories, reminiscent of the disruptions during the COVID-19 pandemic.

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