Broadcom Inc. (NASDAQ:AVGO) shares cratered roughly 15% in Thursday premarket trading to around $408, even after the custom-silicon leader delivered record quarterly results, a brutal verdict that says far more about expectations than performance.

Broadcom reported fiscal second-quarter revenue of $22.2 billion, edging past the Street’s $22.1 billion, with adjusted EPS of $2.44 versus the $2.39 consensus. AI semiconductor revenue surged 143% year-over-year to $10.8 billion.

By almost any standard, it was a blowout. The problem was the guidance.

Broadcom steered third-quarter AI semiconductor revenue to $16.0 billion, below the $16.4 billion Street estimate, and CEO Hock Tan declined to raise the full-year AI target, reiterating fiscal 2027 AI revenue “in excess of $100 billion.”

Against the elevated expectations baked into a stock at record highs, an in-line revenue guidance was not enough.

Goldman Says Buy The Broadcom Pullback

Goldman Sachs is treating the selloff as an opportunity.

Analyst James Schneider reiterated a Buy rating and lifted his 12-month price target from $500 to $525, applying an unchanged 30x multiple to a raised normalized EPS estimate of $17.50. From Thursday’s premarket print near $408, that target implies nearly 30% upside.

Broadcom also remains in the firm’s “Conviction List” of stocks to buy.

“We ...