Broadcom Earnings Trigger $1.3 Trillion AI Sector Sell-Off

A massive sell-off in artificial intelligence stocks erased approximately $1.3 trillion in market value during a single session on June 6, 2026. The downturn was triggered by Broadcom Inc., which reported record second-quarter fiscal 2026 revenue of $22.19 billion, a 48% year-over-year increase. Despite a 143% surge in AI semiconductor revenue to $10.8 billion, Broadcom shares plummeted between 13% and 20% as investors reacted to a third-quarter AI chip forecast of $16 billion, which missed analyst estimates of $17.2 billion.

CEO Hock Tan maintained the company's fiscal 2027 AI revenue target at $100 billion rather than raising it, fueling concerns that AI hardware demand may be peaking. Additionally, investors flagged margin compression, as the shift toward custom Application-Specific Integrated Circuits (ASICs) for clients like Alphabet Inc., Meta, OpenAI, and Anthropic lowered consolidated gross margins from 77.1% toward a projected 74%.

The volatility coincided with market-wide catalysts, including Alphabet's announcement of an $80 billion equity raise for AI infrastructure and Jensen Huang's predictions at Computex Taipei that Marvell Technology would become a trillion-dollar company. The broader sector decline was further exacerbated by a strong May jobs report, which raised fears that the Federal Reserve would maintain high interest rates. This triggered sharp declines for other chipmakers, including Nvidia, AMD, and Micron Technology, as the market re-evaluated the steep premiums associated with AI growth.