Broadcom Inc. (AVGO) saw its stock price decline by 3.91% on December 17, 2024, closing at $240.23, down from the previous close of $250.00. The stock opened at $240.65 and fluctuated between a high of $242.47 and a low of $233.82, with a significant trading volume of 68,823,076 shares, nearly 274% of its average daily volume. The decline was primarily driven by a broader cautious sentiment within the semiconductor sector, despite Broadcom's recent strong performance in its AI business, which saw a 220% increase in fiscal 2024. Concerns over the sustainability of AI demand and Broadcom's high valuation, with a P/E ratio significantly above the sector's median, contributed to the downward pressure.
Additionally, macroeconomic factors played a role, as stronger-than-expected retail sales data heightened concerns about potential interest rate decisions by the Federal Reserve, affecting tech stocks like Broadcom. Profit-taking activities also influenced the stock's decline, with notable sales from Jim Cramer's Charitable Trust following a recent surge in Broadcom's share value. Despite the company's positive outlook and recent AI-driven growth, the market's skepticism about high valuations and potential overvaluation led to a pullback in Broadcom's stock price.