KUALA LUMPUR, June 5 (Bernama) -- Bursa Malaysia closed higher, with the benchmark index rising 0.60 per cent as bargain-hunting persisted following the recent sell-off, despite weaker performances across regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained 10.17 points to 1,693.43 from Thursday's close of 1,683.26. The benchmark index opened 3.19 points higher at 1,686.45 and traded between 1,684.36 and 1,698.53 during the trading session. However, broader market sentiment remained negative, with losers outnumbering gainers 666 to 477. A total of 574 counters were unchanged, 958 untraded and 12 suspended. Turnover fell to 3.41 billion units worth RM3.04 billion from 3.47 billion units worth RM3.58 billion on Thursday.
Summary
Broadcom delivered strong results, but the stock fell ~13% because expectations were even higher.
The issue wasn’t weak numbers — it was not beating the “AI hype expectations.”
What Happened
Broadcom reported a strong quarter:
- Revenue: $22.19B (+48% YoY)
- Net Income: $12.07B (+55% YoY)
- AI semiconductor revenue: $10.8B (+143% YoY)
- Margins remained strong (Operating margin ~67%)
On paper, this is a very powerful AI-driven quarter
Why The Stock Still Crashed
1. AI Guidance Didn’t Beat the “Real Expectation”
- Q3 AI revenue guided: $16B
- Market expected: ~$16.3B+
Even a small miss = big disappointment in AI stocks
2. No Upgrade to Long-Term AI Target
- 2027 AI revenue target: > $100B (unchanged)
Market wanted:
“Raise the ceiling” → not just repeat guidance
3. Google Risk (Key Concern)
Alphabet
- Broadcom depends heavily on Google TPU chips
- Management hinted Google may diversify suppliers
Not losing business — but future share may dilute
4. Nvidia Pressure in AI Networking
Nvidia
- Broadcom AI networking: ~$4.3B
- Nvidia networking: $14.8B
👉 Growth gap:
- Broadcom: +143% YoY
- Nvidia: ~+199% YoY
→ Market sees competition increasing, not dominance
Key Insight
This is a classic “great results, bad reaction” situation.
👉 When expectations are extremely high:
- Good = not enough
- Strong = disappointment
- Only “exceptional surprise” moves the stock up
Investor Takeaway
- AI story is still intact, Broadcom remains a key player
- But valuation is stretched → expectation risk is high
- Watch:
- AI growth vs guidance
- Google dependency
- Competition vs Nvidia
In AI stocks, sentiment matters more than numbers
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