Trump Pushes AI, But Broadcom Stock Still Drops

Benzinga

Broadcom (AVGO) shares are down nearly 10% today after investors reacted to weaker margin guidance and a sharply higher expected tax rate for fiscal 2026. This comes as President Trump signs a major executive order aimed at accelerating U.S. artificial intelligence development.  In this video, we break down why Broadcom is selling off despite strong AI demand, what the guidance actually means, and how investors are thinking about margins, profitability timing, and AI infrastructure heading into 2026.  Stock prices mentioned reflect levels at the time of recording.

Transcript

00:00So, Broadcom just reminded investors that even AI winners can get punished.

00:04Shares of Broadcom are down nearly 10% today, trading around $366,

00:09even as Donald Trump in Washington pushes harder into AI.

00:13You see, here's what's happening.

00:14President Trump just signed an executive order to create a single national framework for artificial intelligence,

00:20aimed at accelerating US AI leadership and cutting through state-level regulation.

00:25But while that's a long-term tailwind for AI infrastructure, Broadcom is dealing with short-term reality.

00:31The company delivered guidance that spooked investors pointing to shrinking gross margins

00:35and a much higher tax rate heading into fiscal 2026.

00:39That's overshadowing Broadcom's massive AI exposure and strong long-term positioning

00:45in chips, networking, and data center infrastructure.

00:48So, today's sell-off isn't about AI demand disappearing, it's about profitability timing.

00:54Broadcom is still a key player in the AI build-out, but markets are asking a simple question,

00:59how long will it take for AI growth to turn into cleaner margins?

01:03That answer will matter a lot in 2026.

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