The chip designer reported rapid revenue growth as demand continues to rise for chips to fill the data centers that power artificial-intelligence models.

Broadcom shares fell more than 11% on Friday after the chipmaker warned growing sales of lower-margin custom AI processors were squeezing profitability, sparking worries that the business may be less lucrative.

Goldman Sachs analyst Kash Rangan lowered its price target to $220 from $320, while maintaining a neutral rating. Rangan cited modest reported revenue growth and noted that higher capital expenditures and free cash flow burn increased concerns over Oracle’s growing financial needs.

Investors pulled back from the chip firm despite beating Wall Street’s expectations for quarterly earnings and revenue.

Broadcom stock plunges as lower-margin AI revenue pressures profitability despite strong earnings and a record $73B backlog.

Broadcom stock dips after Q4 earnings, but booming AI chip revenue signals 2026 growth. Click here to read my earnings analysis of AVGO stock.

Broadcom Inc. has been one of the hottest stocks in the market this year, driven by the enthusiasm for all things artificial intelligence. But with its quarterly earnings due after the close Thursday,