Broadcom Inc. (AVGO) shares slipped more than 1.5% on Friday, caught in a wave of selling that hit semiconductor stocks as investors worried about new tariffs on tech products. The concern? Higher costs and tighter supply could slow down the AI infrastructure buildout that has been a major growth driver for chipmakers.
Technology was the worst-performing sector of the day, dropping 1.31%, while the S&P 500 only dipped 0.14%. Six sectors traded lower, and the advance-decline ratio sat at 0.8, showing that the selling was fairly broad.
Tariff Talk Rattles the Chip Trade
The Trump administration is reportedly considering expanding semiconductor tariffs to cover a wider range of tech products, including laptops, gaming consoles, and data-center servers. That would hit right at the heart of the AI infrastructure boom, which relies on a steady flow of chips and servers.
The White House pushed back on the reports, calling the tariff coverage "baseless speculation" unless officially announced. It also said the administration is taking a "nimble, nuanced, and multi-faceted approach" to bring critical manufacturing back to the U.S.
Despite the pushback, investors stayed defensive. The Nasdaq fell 0.61%, and the Russell 2000 dropped 1.26%. Broadcom actually held up a bit better than the broader tech sector, but it still moved lower alongside other large-cap chip stocks that depend on AI infrastructure demand.
Earnings Are Coming: What to Watch
The big event is just around the corner. Broadcom is set to report earnings on September 2, 2026, and the numbers are expected to be impressive:
- EPS Estimate: $3.16, up from $1.69 a year ago
- Revenue Estimate: $29.44 billion, up from $15.95 billion a year ago
- Valuation: P/E of 61.8x, which is a premium compared to peers
Analysts are bullish, with a Buy rating and an average price target of $511.13 (based on 45 analysts), ranging from $400.00 to $582.00. Recent analyst actions include:
- RBC Capital: Maintained Sector Perform with a $400.00 forecast (August 26)
- BMO Capital: Initiated with Outperform and a $455.00 forecast (August 21)
- Erste Group: Downgraded to Hold (July 7)
ETF Exposure: A Double-Edged Sword
Broadcom is a heavyweight in several popular semiconductor ETFs, which means fund flows can have an outsized impact on its stock. Here are the top funds:
- iShares Semiconductor ETF (SOXX): 8.12% weight
- First Trust NASDAQ Technology Dividend Index Fund (TDIV): 8.05% weight
- Invesco PHLX Semiconductor ETF (SOXQ): 9.94% weight
Because AVGO carries such a heavy weight in these funds, any significant inflows or outflows will likely force automatic buying or selling of the stock. That can amplify moves in either direction.
Price Action
Broadcom shares were down 1.52% to $365.89 at the time of publication on Friday, according to market data.
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