Somewhere between the hype and the reality of artificial intelligence, a $1.3 trillion bill came due. US semiconductor and technology stocks suffered a sharp, single-day wipeout on June 5, 2026, erasing roughly $1.3 trillion in combined market value after investors decided the AI trade had gotten a little ahead of itself.
The proximate cause was Broadcom. The chipmaker released its fiscal Q2 earnings on June 4, and the numbers themselves were not the problem. The problem was what comes next.
What Broadcom actually said
For Q3, Broadcom projected AI chip sales of $16 billion. Street expectations were sitting at $17.2 billion. In English: Broadcom told analysts to expect roughly $1.2 billion less in AI chip revenue than they had modeled, and the market responded the way markets do when a growth story hits a speed bump.
Broadcom shares dropped more than 12% following the report. The company also declined to raise its long-term revenue forecast of over $100 billion for fiscal 2027, which had been another lever investors were watching. No upgrade to the long-term number, combined with a near-term guidance miss, gave sellers all the permission they needed.
