Broadcom stock falls despite new AI data center partnership

Shares of Broadcom AVGO fell sharply on Tuesday as investors continued to rotate away from high-growth technology stocks.

The decline came despite the company's announcement of a major artificial intelligence infrastructure partnership with Apollo Global Management and Blackstone.

Broadcom stock dropped 6.2% during the session as the broader technology sector remained under pressure.

The stock then recovered some of its losses and was trading down 1.31% at the time of writing. 

The decline followed last week's selloff, which began after the chipmaker reported strong fiscal second-quarter results but maintained its forecast for more than $100 billion in AI semiconductor revenue by fiscal 2027.

Investors had hoped for a higher outlook given the strong demand environment for AI infrastructure.

Instead, management's third-quarter AI revenue guidance largely matched Wall Street's already elevated expectations, triggering profit-taking across AI-related stocks.

The broader market backdrop added further pressure. The Nasdaq Composite fell 1.37%, while investors favored defensive sectors such as real estate and healthcare over technology.

AI outlook fails to satisfy investors

Despite reporting solid results, Broadcom's unchanged AI revenue forecast disappointed investors looking for stronger evidence of accelerating growth.

The company remains one of the leading suppliers of custom AI chips and networking solutions.

However, after reaching a new 52-week high in June, shares have entered a consolidation phase.

Market participants also rotated into defensive sectors during Tuesday's session. The Real Estate Select Sector SPDR Fund gained 2.52%, while the Health Care Select Sector SPDR Fund advanced 1.47%.

The shift weighed on semiconductor stocks broadly, with Broadcom trading in line with weakness across the Nasdaq and the wider chip sector.

Technical indicators suggest momentum has cooled.

The stock is currently trading below its 20-day and 50-day moving averages, although it remains above its 100-day and 200-day averages.

A golden cross formed in April continues to support the longer-term trend.

Broadcom launches AI XPV platform

While investors focused on near-term concerns, Broadcom unveiled a significant partnership aimed at accelerating AI infrastructure deployment.

The company joined Apollo Global Management and Blackstone to launch the AI XPV Platform, a new initiative designed to support more than 20 gigawatts of AI computing capacity through 2028.

Apollo and Blackstone will serve as anchor investors for the platform.

The initiative begins with a $35 billion investment led by Apollo to support Anthropic's previously announced expansion of more than one gigawatt of compute infrastructure.

Anthropic is leasing infrastructure from cloud and data-center provider Fluidstack for the project.

The capacity is expected to be deployed at Fluidstack-operated facilities beginning in mid-2026.

In a statement announcing the partnership, Apollo described the arrangement as a new model for accelerating AI infrastructure deployment by combining semiconductor expertise with long-term private capital.

Anthropic expansion highlights AI demand

The collaboration underscores growing demand for AI infrastructure as technology companies race to expand computing capacity.

"We are at a historic inflection point where the demand for AI compute is fundamentally reshaping the global economic landscape," said Broadcom CEO Hock Tan.

Tan added that the platform enables the company's "rapidly scaling customers, starting with Anthropic, to realize their most ambitious AI visions with speed and certainty."

The broader partnership aims to support more than 20 gigawatts of computing capacity for leading AI developers, including OpenAI, by 2028.

Broadcom said the initiative will help scale the deployment of custom AI chips and computing systems while reducing the cost and power requirements needed to train AI models.

The announcement also reinforces Broadcom's growing role within the AI ecosystem.

In addition to supplying custom chips, the company is increasingly helping customers secure the infrastructure required to support large-scale AI development.