Why does the stock price remain under pressure despite strong financial results?

In June, Broadcom delivered an earnings report with almost no obvious weaknesses: FY2026 second-quarter revenue grew 48% year-over-year, AI semiconductor revenue grew 143% year-over-year, and AI revenue growth guidance for the next quarter further exceeded 200%.

However, the capital market’s reaction was completely the opposite. Following the earnings release, Broadcom’s stock price tumbled 13%, continued to pull back in June, and entered range-bound trading in July; as of July 28, it closed at $380.91, representing a cumulative decline of approximately 21% compared to its pre-earnings level.

The issue lies not in the performance, but in expectations. The…