The AI infrastructure cycle just cracked. That is the consensus trade this morning as Broadcom sells off sharply in premarket, down more than 15% after an earnings report that, by every fundamental measure, was one of the strongest in the semiconductor sector this year.
The consensus is wrong.
Look at what actually happened inside this report.
AI revenue of $10.8 billion represented 143% year-over-year growth. Adjusted EBITDA hit $15.2 billion with a 69% margin.
Q3 revenue guidance of $29.4 billion implies 84% year-over-year growth. The Q3 AI number of $16 billion is a 48% sequential jump from Q2 and still represents more than 200% growth from the same quarter last year.
The market wanted $17.2 billion and got $16 billion. That $1.2 billion gap is the entire selloff. Not a revenue miss, not margin compression, not a customer defection, just a guidance number that grew 200% instead of 230%.
The customer list is the strongest tell. Google, Anthropic, OpenAI, and Meta each committed to multi-year, multi-gigawatt AI compute programs powered by Broadcom's custom accelerators and networking silicon. These are contracted revenue streams, not speculative design wins.
Broadcom also booked $6 billion in new AI orders from two previously unannounced customers during the quarter.
The pattern repeats across this earnings season. Dell beat revenue by $9 billion and gained 35%. Marvell surged more than 30% in a single session after Jensen Huang called it the next trillion-dollar company.
The companies delivering against AI infrastructure demand are posting numbers that were unthinkable 18 months ago. The ones falling short of peak expectations are still growing at triple-digit rates. We covered the full earnings streak yesterday.
If the cycle were cracking, you would see order cancellations and backlog declines. You would see hyperscaler capex guidance trimmed. None of that is happening.
Alphabet just raised $80 billion specifically to fund AI infrastructure.
What would actually signal a peak? Watch for Broadcom's order intake declining sequentially. Watch for the $100 billion fiscal 2027 target being formally cut, not just left unchanged.
Until one of those things happens, this selloff is an expectations reset, not a fundamental one.
Before the report, Broadcom traded near all-time highs. The premarket selloff has compressed the stock by more than 15%, pricing in a slower trajectory than the company guided. But the company guided 84% total revenue growth and 200%-plus AI revenue growth for next quarter.
The trajectory did not break.
Semiconductors broadly are pulling back this morning. But selloffs driven by guidance psychology rather than demand destruction tend to create separation. The companies building custom silicon, networking fabric, and optical interconnects for trillion-dollar AI buildouts do not lose relevance because one guidance print landed $1.2 billion light.
One other name selling off this morning
CrowdStrike is down roughly 11% in premarket after reporting its strongest quarter on record. Revenue rose 26% to $1.39 billion, and record net new ARR hit $256 million.
The company announced a 4-for-1 stock split effective July 2 and posted its first GAAP profit. But billings growth of 17.7% missed, and that single metric overshadowed all of it. We covered the full breakdown last night.
SpaceX IPO roadshow starts today
Two weeks ago we asked whether SpaceX was worth $1.75 trillion. The IPO roadshow starts today with a fixed price of $135 per share, targeting $75 billion in proceeds at a $1.75 trillion valuation. If priced as expected on June 11, it will be the largest IPO in U.S. history.
Blue Origin's New Glenn explosion has since eliminated the only American heavy-lift alternative, and Goldman Sachs is running the books. Every late-stage private company eyeing a 2026 listing is watching whether institutional demand holds at this valuation for a company that has not yet posted a full-year profit.
Markets and data
The S&P 500 snapped a nine-session winning streak Wednesday, falling 0.74% to 7,554. The Nasdaq pulled back 0.89%. The 10-year yield edged up to around 4.48% after Wednesday's hot ADP report.
Nonfarm payrolls land tomorrow morning. The ADP print Wednesday showed the strongest private-sector hiring since January 2025. A strong number would make the case for rate relief even harder to make.
WTI eased to around $95 after three straight sessions of gains. Gold is pressing back toward $4,500. The Broadcom selloff is pulling semiconductor names lower across the board.
