Broadcom shares fell more than 6% on Friday after Rothschild & Co Redburn downgraded the semiconductor company to Neutral from Buy and cut its price target by 33%, from $595 to $398. The downgrade followed a five-session rally driven by investor rotation away from Nvidia after CEO Jensen Huang's resignation amid controversy. Rothschild & Co Redburn argued that optimism over Broadcom's potential custom AI chip gains may be premature.
The firm highlighted Broadcom's backstop arrangement for Anthropic's rack leases, under which Broadcom's maximum potential liability could reach approximately $43 billion. Analysts warned this creates meaningful financial risk if Anthropic or other frontier AI lab customers fail to become financially self-sufficient. Redburn also cited uncertainty around Google's customer-owned tooling efforts, stating: “Beyond this, the market needs reassurance that Google’s customer-owned tooling efforts will not become widespread.” The analysts added that upside potential is appreciable but unlikely to occur quickly.
Wall Street remains broadly bullish on Broadcom, with 29 of 31 analysts assigning a Buy rating according to TipRanks. In a separate development, IonQ stock tanked on November 13 after CFO Inder Singh stepped down immediately and Gary Merril of Commvault was named as his successor starting early December. Thomas Austin, formerly of Juniper Networks, was appointed chief accounting officer. The abrupt finance team reshuffle raised uncertainty during a period of rapid expansion requiring careful spending and acquisition integration.
IonQ reported third-quarter sales of nearly $174 million, up 336% year-over-year, and raised 2026 guidance to at least $505 million. However, acquired foundry SkyWater contributed $83.5 million of quarterly sales, while platform segment revenue grew 127% to $90.3 million. The company also posted a $133.6 million adjusted EBITDA loss. IonQ held $1.7 billion in cash and investments as of September 30, rising to $3.7 billion on a pro forma basis after October's $2 billion equity offering. The decline coincided with broader weakness in quantum computing stocks.
