European semiconductor shares extended losses on Friday, marking a second consecutive session of declines as market participants continued to process Broadcom’s recent quarterly report and its outlook for AI-related revenue.
Among the movers, ASML, ASM International and BE Semiconductor each fell in the mid-single digits - within a roughly 3% to 4% range. A broader set of chip-related names including STMicroelectronics, Infineon, Soitec, Siltronic and ams OSRAM recorded steeper drops, sliding between about 3% and 8%.
The selling followed a wider retreat in European technology stocks on Thursday that was set off by Broadcom’s results, which the company released after U.S. markets closed on Wednesday. While Broadcom reported revenue of $22.2 billion and earnings per share of $2.44, metrics that were narrowly ahead of Wall Street expectations, market attention centered on the company’s forward-looking AI targets.
Investors had expected Broadcom to raise its fiscal 2027 AI revenue goal amid strong demand for its custom AI chips, but management left the target at $100 billion. For the current quarter, Broadcom set AI chip revenue guidance of $16 billion, below the roughly $17.2 billion analysts had been anticipating. At the same time, Broadcom’s overall revenue guidance of $29.4 billion came in above consensus.
Broadcom’s shares reacted sharply, falling 12.6% on Wednesday. That move rippled through European markets and pulled several peers lower, including Nokia, STMicroelectronics, Infineon, ASML and ASM International.
Bernstein analyst Stacy Rasgon, while raising his price target on Broadcom to $550 from $525, sought to frame the reaction in a longer-term context. "We suspect the shares may take a pause for the next couple of quarters. But the story gets interesting again once we enter 2027," he said. He added: "At the end of the day we have a company growing revenues and EPS >50%, with gross/operating margins in the 70s/60s, and potentially trading at a teens P/FE in an environment that is only getting stronger."
Market impact
- European semiconductor stocks led the regional tech selloff as investors reassessed growth expectations for AI-related chip demand.
- Major equipment and component suppliers to the chip industry were among those seeing meaningful intraday declines.
- The move underlines sensitivity in equity markets to forward-looking revenue targets and quarterly guidance from large-cap chipmakers.
Near-term outlook
With Broadcom keeping its fiscal 2027 AI target unchanged and trimming near-term AI revenue guidance relative to analyst estimates, market participants appear to be moderating near-term expectations for the AI-driven revenue acceleration that had buoyed several semiconductor names.
Thursday’s broader tech retreat and Friday’s follow-through indicate the sector remains reactive to guidance signals from dominant suppliers of custom AI silicon.