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Broadcom Slides 4% After Hours as AI Chip Rally Hits a Rocky Patch

Broadcom (AVGO) dropped nearly 4% in after-hours trading Monday, as a broader selloff in chip stocks reignited debate over whether the AI trade has gotten ahead of itself.

OurAlpha

13 Jul 2026 — 2 min read

Broadcom shares tumbled after hours, as the AI chip rally faces a market reality check.

Broadcom (AVGO) slid in after-hours trading Monday, changing hands at $384.05 as of 4:30 p.m. ET, down 3.98% from Friday's close of $399.97. The move comes amid a volatile week for chip stocks, with the market continuing to debate whether the AI trade has become overheated.

Broadcom (AVGO) last traded at $384.05 after hours, down 3.98% (-$15.92). The stock touched an intraday low of $383.42 and a high of $395.745 during the regular session.
Last week (through July 10), the Nasdaq rose 1.74% and the S&P 500 gained 1.23%, with both indices closing higher in three of the last four weeks.
The Dow Jones Industrial Average closed above 53,000 for the first time on Monday (July 6), but gave back those gains amid rising U.S.-Iran tensions, ending the week down 0.5%.
Reuters reported on July 13 that chip stocks are navigating a "rocky patch," as investors question whether AI-related stocks have become overextended.
Last week, a decline in SK Hynix shares weighed on Asian tech stocks, amplifying concerns about the outlook for AI chip demand.

Broadcom (AVGO) fell in after-hours trading Monday, changing hands at $384.05 as of 4:30 p.m. ET, down 3.98% from its previous close of $399.97. The stock opened the regular session at $393.475, hit a high of $395.745, and bottomed out at $383.42. The decline comes as the broader chip sector faces headwinds, with lingering worries that AI-related stocks are overvalued.^[Reuters]

Chip Stocks Hit a Rocky Patch

In a July 13 report, Reuters noted that chip stocks are navigating a "rocky patch," as investors reassess whether the AI trade has become overextended, fueling recent volatility in the sector.^[Reuters] Broadcom, a key player in the AI chip space, is moving in lockstep with the broader sector's turbulence. Last week, a drop in SK Hynix shares added to doubts about the outlook for AI chip demand.^{[Yahoo Finance]}

Last Week: AI and Oil Deliver a Double Whammy

CNBC's July 11 market recap highlighted a volatile week: Wall Street opened at record levels, with the Dow closing above 53,000 for the first time on Monday, only to surrender those gains as U.S.-Iran tensions escalated, ending the week down 0.5%. Meanwhile, chip stocks—once the market's hottest trade—also swung wildly as investors continued to question whether the AI rally had gone too far. Still, the tech-heavy Nasdaq rose 1.74% for the week, and the S&P 500 gained 1.23%, with both indices closing higher in four of the last five weeks.^[CNBC]

Institutional Moves and Sector Dynamics

On the institutional front, some investors are repositioning their chip exposure. According to MarketBeat, Sumitomo Mitsui Trust Group Inc. recently trimmed its stake in Taiwan Semiconductor Manufacturing (TSM).^[MarketBeat] Separately, Zacks Research downgraded Sibanye Gold (SBSW) to "Strong Sell" on July 11, reflecting a cautious stance on certain sectors.^[MarketBeat] These moves, combined with the broader chip stock volatility, paint a complex picture for the market.