Will Broadcom Stock Recover After Its Guidance Disappointment, Or Should You Cut Your Losses?

Broadcom shares fell 14% after Q2 earnings despite beating revenue and EPS estimates, with AI chip revenue reaching $10.8B (+143% YoY). The sell-off was driven by management's conservative Q3 AI revenue guidance of $16B versus whisper expectations of $17.2B, and reaffirming rather than raising its $100B AI revenue target by 2027. The article argues this represents a correction of unrealistic expectations rather than fundamental weakness, with management intentionally tempering hype to avoid future disappointments.