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News
Friday, June 05, 2026
What’s happening: Shares of Broadcom fell sharply to close almost 13% lower on Thursday following the release of the company’s quarterly results.
What happened: The semiconductor and infrastructure software products maker reported record results for the fiscal second quarter.
The company also projected more than 200% year-on-year growth in AI semiconductor revenues and 84% total revenue growth.
How were the results: The Palo Alto, California-based company reported strong quarterly results benefiting from rising AI demand.
Why it matters: Broadcom is among the biggest beneficiaries of the massive AI infrastructure buildout that is currently underway, as its custom AI accelerators, networking solutions, and connectivity products are critical for this. The company’s clients include some of the world’s biggest AI spenders, like Alphabet and Meta Platforms.
Broadcom’s record results were driven by strength in AI semiconductors and high demand for XPU and networking solutions.
The company reported that its AI semiconductor revenues surged 143% year-on-year to $10.8 billion in the fiscal second quarter. CEO Hock Tan said the growth, which exceeding the company’s own projections, was driven by “increasing demand for custom AI accelerators and AI networking.”
Although the company guided to strong growth in the third quarter and fiscal year, the projections fell short of elevated market expectations.
Management guided to AI semiconductor revenue growing more than 200% year-on-year to $16.0 billion in the third quarter, missing consensus of $17.2 billion. Their fiscal 2026 AI semiconductor revenue outlook of $56 billion also came in below market expectations of $57.5 billion.
Management guided to total revenues of $29.4 billion for the third quarter, above consensus of $28.3 billion.
Analysts from several investment banks, including JPMorgan, DA Davidson and KeyBanc Capital Markets significantly raised their price targets for Broadcom following the earnings call.
Elevated expectations and profit taking drove the stock lower on Thursday, after closing near record highs on Tuesday and hitting record intraday highs on Wednesday.
How shares responded: Broadcom’s shares fell 12.59% to $418.91 on Thursday. Even after this pullback, the stock is higher by almost 21% year-to-date.
What to watch: Investors will continue monitoring the growing AI infrastructure buildout and rising AI budgets of tech giants.
Context: The US dollar rose slightly this morning as investors digested the latest economic reports.
Details: The US reported disappointing initial jobless claims for the last week of May on Thursday. The number of people claiming unemployment benefits rose by 13,000 to 225,000. This was above market expectations of 212,000 and represented the highest initial claim count since the first week of February.
On a more positive note, continuing jobless claims in the US declined to 1,777,000 in the week ending May 23 from 1,785,000 in the previous week. However, on a 4-week moving average, jobless claims rose to 214,750 in the week of May 30 from 208,250 in the previous week.
The US dollar traded under pressure on Thursday, with an improvement in risk sentiment due to the Israel-Lebanon ceasefire dampening demand for safe-haven assets. Hopes of the US also entering into an agreement with Iran lifted market sentiment.
Following several rounds of US-mediated discussions, Israel and Lebanon agreed to a ceasefire contingent upon certain conditions being met. This raised hopes of the US-Iran war coming to an end, after peace talks stalled following fresh strikes by both countries earlier this week.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose 0.01% to 99.42 this morning.
What to watch: Investors will continue monitoring developments related to the US-Iran conflict.
Data on non-farm payrolls (NFP) and unemployment rate will be in focus today (1630 UAE Time). Nonfarm jobs added in the US, which declined to 115,000 job adds in April from 185,000 in the previous month, is expected to decline further to 85,000 job adds in May. The US unemployment rate, which held at 4.3% in April, is expected to remain the same in May.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.27%, 0.60%, 1.15% and 0.52%, respectively.
Russian President Vladimir Putin said he was open to negotiations to end the war with Ukraine. The news sent the USD/RUB pair lower in forex trading this morning.
UK’s S&P Global UK Construction PMI fell to 38.2 in May, from 39.7 in April. The figure missing market expectations of 40.2 and representing the sharpest contraction in construction activity since May 2020 exerted pressure on the GBP/USD forex pair.
Japan’s household spending fell 0.5% year-on-year in April, easing from the previous month’s 2.9% decline. The figure coming in better than market expectations for a 1.5% decline sent the USD/JPY pair lower in forex trading this morning.
Mexico’s gross fixed investment contracted 2.6% year-on-year in March. This being better than market expectations of a 3.1% decline exerted pressure on the USD/MXN forex pair.
South Korea’s current account surplus contracted to $28.29 billion in April. Despite the figure representing the second-largest monthly surplus on record, the USD/JPY rose in forex trading this morning.
Eurozone’s employment change (1300 UAE Time) and GDP growth (1300 UAE Time), Italy’s retail sales (1300 UAE Time), India’s GDP growth (1430 UAE Time), Mexico’s consumer confidence (1600 UAE Time), Canada’s unemployment rate (1630 UAE Time), and Brazil’s new car registrations (1800 UAE Time).
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