Broadcom’s sharp decline following its latest earnings report is raising questions about whether investor expectations for artificial intelligence-related stocks have become too aggressive after a powerful rally across the technology sector.
BNN Bloomberg spoke with Hans Albrecht, equity fund manager at Option Pit, who said AI demand remains strong but warned that excessive enthusiasm, stretched positioning and speculative behaviour are increasing volatility beneath the surface of the broader indexes.
Key Takeaways
- Broadcom’s decline reflects exceptionally high investor expectations rather than a breakdown in the long-term AI investment thesis.
- Options activity and investor positioning suggest speculative behaviour has become elevated across many AI-related stocks.
- The semiconductor sector has delivered outsized gains, but investors are increasingly searching for new areas of the AI ecosystem that have not yet been fully revalued.
- Large AI-related IPOs could create temporary pressure on existing technology leaders as investors reallocate capital.
- Apple could benefit from AI adoption through device upgrades and hardware demand without requiring the same level of AI spending as some competitors.
Read the full transcript below:
LINDSAY: And as we just mentioned, shares of Broadcom are plunging in the pre-market today after the company posted its outlook for AI semiconductor revenue that missed expectations. The declines are spreading to other areas of the market as well, as analysts worry the rally in tech stocks may have gone too far. Joining us now is Hans Albrecht, equity fund manager at Option Pit, to break this all down. Good morning. Great to have you join us.
HANS: Good morning, Lindsay. Thanks for having me.
LINDSAY: So, one of the big newsmakers today is Broadcom stock, which is plunging in the pre-market. What do you think is behind this kind of sharp drop for this company?
HANS: Well, I think part of it is going to be the setup was sort of priced for perfection, right? The stock was a $300 stock. We ran up to about $480, and the guidance wasn’t quite raised the bar enough for people. They didn’t really touch the revenue target for 2027, so maybe a little bit disappointing there, given the runup in the stock.
We have seen many stocks continue their rallies into good prints. This is not one of them, and I think part of that is that the semiconductor trade has been one of the strongest trades we’ve seen in the last decade. It’s been sort of relentlessly up, and I think we’re seeing some interesting things.
I watch the option space, right? So there’s sort of when people get excited to the upside, we call that FOMO, that fear of missing out. We see that play out in upside call skew, and that means people are really moving aggressively into those upside calls to participate in that upside, and we’ve seen that to an extreme lately.
So I think there are some signs out there that things have gotten a little bit overdone in the short term, of course. It’s all based on the thing that I keep talking about, which is infinite compute demand. This is early innings for AI, but we know that infinite compute demand doesn’t mean infinite rises in stocks, and I think we’re seeing that sort of unwind just a little bit here.
LINDSAY: Right. Because going back to Broadcom, just quickly, like you were talking about, a revenue miss for 2027. It was the forecast for AI chip revenue, I believe, that was the miss here. Correct me if I’m wrong, because the company predicted $56 billion in AI chip revenue. That’s falling short of $57 billion, which was estimated.
So, for Broadcom in particular, do you think maybe investors are overreacting a little bit to the latest quarterly results and the revenue forecast moving forward?
HANS: Well, I think that space has gotten rather competitive, right? It used to be the Nvidia show for a few years. It was all about GPUs.
Broadcom is unique. I like it because it’s sort of the web of other things that kind of connect all of this, and it’s a bit sort of, you know, it’s a part of Google’s success and TPUs and other people’s efforts to get into this business. So it’s, I think, a very, very good business.
I think it’s just that the expectation has been so high based on very valid euphoria in the space as AI continues to expand. But the rerating has happened, right? The excitement has happened.
We’ve seen some of these semiconductor stocks run up 100 per cent in rather short order, and we’ve seen the euphoria switch into other areas of the market where maybe areas have not been rerated.
For example, in the CPU space, in the equipment space, a stock like Dell, where the Street didn’t appreciate what is happening from the sort of endless AI demand, and they’ve sort of looked at that and said, “Oh my gosh,” scratching their head, and said, “Wow, this is something that needs to be rerated.”
So we’re sort of seeing this bit of jumping over each other, figuring out what’s the next area of AI to rerate from the perspective of everybody saying, “Wow, we didn’t realize that was going on.”
So I think the rerating happened in semiconductors. It has had a fantastic run, and because of the exuberance I’m seeing in the option space, you can see people have gotten a little bit too excited. When you get too many people on one side of the boat, well, you know, it can tip over a little bit.
LINDSAY: Okay, let’s move on a little bit to SpaceX, because it’s planning to IPO next week to raise money to fund its AI buildout. So, still talking about AI here, but how do you think the concerns about the tech industry right now will kind of affect the initial listing next week for a company like SpaceX?
HANS: I’m not super excited about this. I think it could be somewhat destabilizing.
I think that if you sort of look at this, there have been ways to get involved in SpaceX for a very long time. Typically, with some of these IPOs, some of the funds that get involved on the IPO have already pre-bought, so you’ve had this availability of stock. The sort of buyer that we typically get for these IPOs is already in and maybe looking to exit, and they’re sort of changing some of the rules, making it easier to exit.
These lockup periods aren’t as long. They’re starting to mess with some of the rules. It’s a little bit stinky, in my opinion, and I do worry about this.
It’s a company that doesn’t make money. OpenAI doesn’t make money. Anthropic doesn’t make money. So we’re taking on these absolutely record-breaking IPOs, and eventually they potentially go into the index as well.
I think what we’re seeing is a little bit of a pullback in some of the other names that are very liquid, these Magnificent Seven stocks, in order to raise money to basically buy SpaceX.
In my view, anything can happen. This is going to be an incredibly interesting IPO to watch, but in my opinion, it’s been trading at $2.4 trillion in the sort of dark market. That’s a little bit high for what this company does.
So I think it can be destabilizing because we are talking about, by far, massive amounts of stock being put into the market.
LINDSAY: Okay, I want to stay on tech stocks for a moment because one of your picks for today is Apple. So tell us why that’s one of your picks for today. What opportunity do you really see with Apple moving forward?
HANS: So I’ve loved Apple for a long time, and a lot of people criticize Apple because they’re not spending, right?
We’ve gone through these phases of, “Oh, people are spending on capex on AI. That’s a great thing.” Then suddenly it’s a terrible thing because we’re not seeing the return on investment.
For Apple, they’ve been sort of sitting back and waiting for AI to come to them, and I think they don’t need to spend, and I think that puts them in a powerful position.
It’s not a cheap stock, but we’ve seen Mac Minis and Mac Studios selling out because of agentic AI. They have a chip, it’s the M5 chip, it’s a kind of GPU-CPU. We were talking about GPUs and CPUs earlier.
So I think Apple really monetizes the cycle, the AI in your pocket. They have a very rabid fan base. They’re willing to pay beautiful margins to have this very chic product.
I think Apple is sort of the dark horse. Part of that has been the actual desktops, the notebooks, the Mac Minis and Studios that are doing well because they are very attuned to this new agentic AI phase of things, just in terms of their hardware capabilities.
So I think they continue to do well. AI in your pocket, Apple is going to absolutely benefit from that.
LINDSAY: Okay, we’ll have to leave it there. Hans Albrecht, equity fund manager at Option Pit, really appreciate you joining us today. Thanks so much.
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This BNN Bloomberg summary and transcript of the June 4, 2026 interview with Hans Albrecht are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
