Why Broadcom Stock Was Down Today

Shares of (NASDAQ: AVGO) were down 2.85% at 10:38 a.m. ET on Thursday. The major market indexes were also down today, but the stock's slide followed a report that Google parent Alphabet was considering dropping the company as a supplier of chips used for artificial intelligence as early as 2027. 

Broadcom stock has surged 44% this year,  as investors view the company as one of the semiconductors best positioned to benefit from growing AI chip demand. Earlier this year, revenue from AI chips made up 15% of Broadcom's business, but CEO Hock Tan previously said that it could comprise a quarter of the firm's chip revenue by next year. 

While Broadcom supplies chips across the IT infrastructure, networking, server storage, broadband, and wireless markets, it faces some concentration risk. For example, sales to Apple account for an estimated 20% of Broadcom's annual revenue over the last two years, with its top five customers making up 35% of the business. 

Continue reading

Source Fool.com