Two tech giants saw their stock prices tumble last week as concerns over AI competition and tempered growth expectations rattled investor confidence. Alphabet (GOOGL) shares dropped 8% in a single week, extending a 30-day decline to roughly 11.6%, following the departure of high-profile DeepMind researchers. Broadcom (AVGO) cratered 24% from its all-time high after its AI chip guidance fell short of sky-high Wall Street hopes. Yet leading analysts from Jefferies and JPMorgan are telling clients the selloffs are overdone, pointing to robust fundamentals and deep competitive moats.
Alphabet’s brain drain spooks the market
The catalyst for Alphabet’s drop was news that Nobel Prize-winner John Jumper, a DeepMind Vice President, is leaving to join Anthropic. This follows the earlier exit of Gemini co-lead Noam Shazeer to OpenAI, just two years after Google effectively paid $2.7 billion to bring him back via the Character.AI deal. Alphabet’s Head of AI Go-to-Market also defected to OpenAI. The string of departures fueled fears that Google is losing ground in the AI arms race. Jefferies analyst Brent Thill, however, reiterated his Buy rating and $445 price target on June 22, calling the pullback “tactical rather than fundamental.” He noted the “musical-chairs dynamic” is industry-wide, not Google-specific, and highlighted the company’s massive user base, TPU chip advantage, and a competitive Gemini model. Alphabet’s Q1 numbers support the bull case: earnings per share of $5.11 crushed the $2.64 consensus, revenue of $109.9 billion beat expectations, and 47 of 54 analysts still rate the stock a Buy or Strong Buy.
Broadcom’s record quarter still disappoints
Broadcom reported fiscal Q2 revenue up 48% year-on-year to $22.2 billion, with AI chip sales surging 143% to $10.8 billion. Yet the stock plummeted because the company guided for about $16 billion in Q3 AI revenue — below the $17 billion-plus investors were banking on. CEO Hock Tan also refrained from raising the long-term target of over $100 billion in AI chip sales by fiscal 2027, which the market interpreted as a red flag. JPMorgan stood firm, keeping its Overweight rating and $580 target, telling clients it would be “aggressive buyers” at these levels. Behind the numbers, demand remains voracious: Q2 AI semiconductor bookings exceeded $30 billion, nearly triple what Broadcom could ship. The company also unveiled its first custom AI chip with OpenAI, called Jalapeño, built for inference and already running GPT-5.3-Codex-Spark. Tan says demand for XPUs and networking is “simply insatiable,” with gigawatt-scale commitments from Anthropic, OpenAI, and Meta.
Bottom line
Both selloffs reflect a market that had priced in perfection. But with Alphabet’s five products each serving over three billion users and Broadcom’s order book overflowing, the fundamental stories remain intact. The analyst consensus is that the dips are buying opportunities.
