TLDR
- Broadcom stock dropped 5.5% on Thursday as AI-related stocks faced continued selling pressure
- The broader market declined with the S&P 500 down 1.2% and Nasdaq falling 1.8%
- A recent government shutdown means October inflation data may not be released, creating uncertainty for Federal Reserve rate decisions
- Missing economic data could make the Fed less likely to cut interest rates in December
- Despite the pullback, Broadcom remains up 44.5% year to date in 2025
Broadcom saw its stock price fall 5.5% by midday Thursday as the connectivity chip maker became the latest casualty in an ongoing selloff of artificial intelligence stocks. The decline came as part of a broader market retreat that saw technology stocks take the hardest hits.
The S&P 500 dropped 1.2% while the Nasdaq Composite fell 1.8% during the same trading session. Broadcom’s losses outpaced both major indexes as investors continued rotating out of AI-related positions.
The sell-off reflects growing valuation concerns across the AI sector. Multiple high-profile AI stocks have faced pressure in recent trading sessions as investors reassess premium valuations in the space.
Broadcom’s position as a leader in connectivity chips for AI infrastructure made it particularly vulnerable to the sector-wide weakness. The company supplies critical components for data centers and AI computing applications.
Government Shutdown Creates Economic Data Gap
The selling pressure intensified due to complications from a recent U.S. government shutdown. While President Donald Trump signed a funding bill ending the shutdown, lingering effects continue to impact market sentiment.
The shutdown prevented government agencies from preparing key economic reports. White House officials indicated that October jobs data might be released without unemployment figures included.
More concerning for investors is the likelihood that October inflation data will not be released at all. This missing information creates a major blind spot for policymakers and market participants.
Interest Rate Uncertainty Weighs on Tech Stocks
The absence of inflation data complicates the Federal Reserve’s decision-making process for its December meeting. Without current inflation readings, the central bank has less information to determine whether an interest rate cut is appropriate.
Market participants had been hoping for rate cuts to support continued economic growth. The uncertainty around whether the Fed will proceed with cuts has created additional volatility in rate-sensitive sectors like technology.
Tech stocks generally benefit from lower interest rates. When borrowing costs decrease, future earnings become more valuable in present-day calculations, which typically supports higher valuations for growth companies.
Broadcom’s valuation has already come under scrutiny due to its strong year-to-date performance. The stock had climbed 44.5% in 2025 before Thursday’s decline.
The company maintains a strong position in AI infrastructure markets. Its connectivity chips remain in high demand from hyperscale data center operators building out AI capabilities.
Analysts continue to monitor AI capital expenditure trends closely. Any signs of cooling spending by major tech companies could pressure Broadcom’s growth outlook and stock valuation.
The semiconductor sector as a whole faced headwinds during Thursday’s session. Chip stocks often move together based on industry-specific factors and broader technology sentiment.
Broadcom closed at $335.24 after falling from an intraday high of $353.62. The stock’s 52-week range extends from $138.10 to $386.48, showing the volatility experienced over the past year.
The company’s market capitalization stood at approximately $1.7 trillion following Thursday’s decline. Trading volume reached 605,000 shares, well below the average volume of 23 million shares.
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