New York, Feb 24, 2026, 10:27 EST — Regular session
- Broadcom shares dropped roughly 3% in morning trading, deepening a decline that’s now stretched into a second day.
- Traders parsed news of a new major AI-chip supply agreement featuring Meta and competitor AMD.
- Nvidia reports earnings Wednesday, with Broadcom set to follow on March 4.
Shares of Broadcom (AVGO) dropped 2.9% to $320.70 early Tuesday, following a 0.7% decline at Monday’s close. AVGO traded between $314.67 and $324.13, with volume hitting roughly 5.1 million shares. AMD jumped roughly 7.5%, while Nvidia barely moved.
The decline stings: Broadcom is wedged into the AI infrastructure, handling custom chips and networking on one end and VMware’s software stack on the other. Investors haven’t hesitated to slash positions as the narrative flips from chasing demand to worrying about costs.
This week, price swings underline just how tough it is to predict where AI spending heads next. Major buyers are locking in lengthy supply deals, yet they’re also splitting orders among different suppliers and pressing for lower-cost silicon whenever possible.
The debate over AI hardware suppliers intensified Tuesday after Meta Platforms and Advanced Micro Devices inked a five-year supply agreement. Under the deal, AMD is set to provide up to $60 billion in AI chips to Meta—plus, Meta now has the option to snap up as much as 10% of AMD. Nvidia stock slipped, while Broadcom also dropped, as traders repositioned on shifting AI hardware prospects. “Meta is locking in supply, diversifying away from a single vendor,” noted Matt Britzman, senior equity analyst at Hargreaves Lansdown. Reuters
Nvidia’s set to report on Wednesday, and after a turbulent stretch for AI names, everyone’s watching. “This earnings in particular is important because people are so concerned about AI spending — whether we’re in a bubble,” said Ivana Delevska, chief investment officer at Spear Invest. Reuters
Broadcom isn’t chasing GPU sales. The real question is whether customers stick with Nvidia’s stack or piece together custom silicon and Ethernet solutions. Broadcom’s role? It designs those bespoke ASICs—processors engineered for specialized tasks—and supplies advanced switching chips found in AI-focused data centers.
Still, bulls face the same snag that’s lingered since December: stronger AI sales can weigh on margins, even as the top line climbs. “We expect first-quarter consolidated gross margin to be down approximately 100 basis points sequentially,” CFO Kirsten Spears noted during the last earnings call—so, a one percentage point dip. Customer concentration keeps cropping up, too. “The backlog is still coming from only five customers,” flagged Kinngai Chan, senior research analyst at Summit Insights. Gil Luria at D.A. Davidson also cautioned: “TSMC costs may squeeze the value Broadcom can realize.” Reuters
So traders want clarity. They’re watching for steady demand—no fresh issues with margins—and they need to see Broadcom turning AI orders into real revenue, not just pushing more of those thinner-margin system sales.
Broadcom plans to release its first-quarter fiscal 2026 numbers after the U.S. close on Wednesday, March 4. The conference call with management kicks off at 5:00 p.m. ET. Investors are keyed in on any word about AI chip traction, gross margin direction, and what executives say about the software segment.
