Broadcom CEO's AI Guidance Triggers Semiconductor Selloff

The semiconductor sector suffered its sharpest two-day decline since April 2025's tariff shock this week, falling more than 8% between Thursday and Friday midday after Broadcom's CEO delivered guidance that failed to meet elevated investor expectations.

Broadcom reported quarterly results that exceeded analyst forecasts and projected next-quarter sales of $29.4 billion, above the Street consensus of $28.6 billion. But CEO Hock Tan left full-year AI semiconductor guidance unchanged at "in excess of $100 billion," disappointing investors who had anticipated an upward revision. The stock plunged 12.6% on Thursday to $418.91, pulling the broader AI infrastructure sector down with it.

Jobs data compounds pressure

The selloff intensified Friday when the May employment report showed payrolls rising by 172,000, nearly double the consensus estimate of 85,000. March and April figures were revised upward by a combined 93,000 jobs, while unemployment held steady at 4.3%.

The robust hiring data, combined with April's Consumer Price Index reading of 3.8% year-over-year—the highest since May 2023—shifted market sentiment on Federal Reserve policy. Money markets now almost fully price in a rate hike by year-end, reversing earlier expectations of cuts. The S&P 500 fell over 1% Friday, with the Nasdaq declining nearly 2%.

Crypto and auto sectors hit hard

Digital assets experienced severe declines. Bitcoin dropped below $60,000, marking a 17% weekly loss—its worst performance since the November 2022 FTX collapse. Strategy, formerly MicroStrategy and the world's largest corporate Bitcoin holder with over 843,000 coins, fell roughly 25% for the week.

Chairman Michael Saylor disclosed selling 32 Bitcoin for $2.5 million between May 26 and May 31, his first sale since December 2022 and a departure from his longstanding "never sell" position.

Ford Motor Co. recorded one of its worst weeks in years, dropping 14% after a four-week winning streak. The automaker announced a recall of nearly 420,000 Expedition and Lincoln Navigator SUVs from model years 2018-22 due to a seat belt pretensioner defect that can lock the belt and increase injury risk in crashes.

Why it matters

The simultaneous pressure from AI sector repricing, inflation concerns, and shifting Fed expectations demonstrates how quickly sentiment can reverse after an extended rally. For technology leaders, Broadcom's conservative stance signals that even companies beating earnings can face severe punishment when guidance doesn't match inflated market expectations. The episode underscores the importance of managing investor expectations in high-growth sectors where valuations have run ahead of fundamentals.

After nine consecutive weeks of gains, markets found multiple catalysts to pause. These details were first reported by Benzinga, a financial news and data company headquartered in Detroit.