Broadcom shares drop amid chip sector selloff

Broadcom Inc shares fell nearly 4.9% in morning trading on Friday to $328.12, as a broad semiconductor sector decline followed Intel Corp's disappointing revenue forecast for the fourth quarter.

Intel Corp reported third-quarter results on Wednesday that exceeded earnings expectations, but provided guidance below Wall Street projections for the current quarter. The company forecast adjusted earnings per share of $0.25 on revenue between $15 billion and $16 billion. Intel's finance chief said PC market weakness is expected to persist through at least the first half of next year.

Broadcom faces additional pressures beyond the sector-wide decline. William Blair recently downgraded the stock to Market Perform from Outperform, pointing to valuation concerns with shares trading at over 40 times earnings.

The company's concentrated AI customer base presents risks, along with its Anthropic financing arrangement. The asset-financing deal could create up to $43 billion in backstop exposure if it fails. Fitch Ratings maintained an A- rating with a positive outlook for Broadcom, citing the company's strong cash generation.

A Form 4 insider filing dated Wednesday showed trading activity by a company officer or director.

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