Broadcom Inc. (AVGO) shares experienced a significant decline on December 18, 2024, closing at $223.62, down 6.91% from the previous day's close of $240.23. The stock opened at $239.55 and reached a high of $239.65 before plummeting to a low of $219.22. The trading volume was notably high at 51,500,368 shares, nearly double the average daily volume, indicating heightened investor activity. The decline follows a period of substantial gains, with Broadcom recently joining the $1 trillion market cap club after reporting a 51% y/y increase in revenue to $14.05 billion, albeit slightly below estimates. This pullback is attributed to profit-taking after the stock's remarkable surge, driven by a 220% increase in AI revenue and strong guidance for future growth.
The broader market environment also contributed to Broadcom's decline, as investors reacted to the Federal Reserve's decision to cut interest rates by a quarter percentage point while signaling a slower pace of future cuts. This announcement led to a selloff in large-cap technology stocks, including Broadcom, as uncertainty around interest rates and potential geopolitical factors, such as proposed tariffs on semiconductor products, weighed on investor sentiment. Additionally, discussions on Reddit forums highlighted Broadcom's impressive dividend policy and AI market potential, but these positive sentiments were overshadowed by the day's broader market dynamics.