$Broadcom(AVGO)$  The after-hours pullback in Broadcom reflects expectation management rather than a breakdown in fundamentals.

Is the semiconductor dip a buying opportunity?

Selective rather than broad. The sector has rerated sharply on the AI theme, so any data point that does not exceed lofty expectations invites profit-taking. That said, secular demand for AI infrastructure, networking, and custom silicon remains intact. High-quality names with pricing power, diversified end markets, and visible cash flows still justify accumulation on weakness. Lower-quality, narrative-driven names deserve more caution.

Has the market abandoned the AI narrative?

No. What we are seeing is a transition from narrative-driven multiple expansion to execution-driven scrutiny. Investors are now asking harder questions about backlog visibility, monetisation timing, margins, and capex intensity. AI is no longer a blanket bid for all semiconductors; it is becoming a stock-picker’s market.

How to interpret AVGO’s earnings and backlog?

AVGO delivered solid earnings and guidance, but the US$73 billion AI backlog likely disappointed because expectations were higher after peers signalled explosive demand. Importantly, backlog size alone is less critical than conversion speed, customer concentration, and margin profile. Broadcom’s strength lies in its custom silicon, networking exposure, and long-term hyperscaler relationships, which tend to produce steadier, high-quality earnings rather than short-term upside surprises.

In summary, this reaction looks like valuation compression, not a thesis break. AI demand remains real, but future gains will favour companies that can consistently translate AI enthusiasm into revenue growth and cash flow, not just large headline numbers.