Broadcom's share price has experienced a downward trend for three straight trading days, plummeting by a cumulative 17.7%. This marks the company's most significant three-day performance slump since March 2020. The market value of Broadcom has seen a reduction of over US$300 billion, a figure almost on par with AMD's total market capitalization. Following this contraction in market value, Broadcom has been surpassed by Meta in the ranking of U.S.-listed companies by market capitalization, causing it to fall out of the top six.

This abrupt decline is primarily attributed to market anxieties regarding the profitability of Broadcom's AI business. Although the company has witnessed swift revenue growth from its AI chips, a decrease in gross margins and an over-reliance on a select few customers have diminished its bargaining power. This has, in turn, fostered a detrimental cycle characterized by 'customer dependence—weakened bargaining power—low gross margins'.