Broadcom's worst three-day stock slide since 2020 marks a humbling of sorts

By Britney Nguyen Meta is now worth more than Broadcom once again Meta regained its position from Broadcom as the sixth-largest U.S. company by market cap on Monday. Broadcom's steepest three-day drop in over five years has the chip maker falling down the ranks of the largest U.S. companies. Shares of Broadcom (AVGO) lost 5.6% on Monday, capping a 17.7% three-day slide that's their worst such stretch since March 18, 2020, according to Dow Jones Market Data. That persistent pressure meant that it only took a fractional Monday gain for Meta's stock (META) to put the Facebook parent company back in the No. 6 spot among the largest U.S. companies by market capitalization. Meta finished the day with a market cap of $1.632 trillion, while Broadcom trailed at $1.605 trillion, according to Dow Jones Market Data. The Facebook parent company has somewhat fallen out of favor with investors recently, owing to fears about the company's artificial-intelligence spending and the company's ability to monetize AI. But since then, a Bloomberg News report said the company could pare back its spending on the metaverse, which had been another area of expense concern. See more: Meta's stock slide erases $215 billion in market value, as Wall Street pans 'runaway' AI spending Last week, Morgan Stanley's Brian Nowak maintained his overweight rating on Meta's stock. Its monthslong selloff, in his view, offered investors a chance to buy up a "Magnificent Seven" winner for cheap. "Meta remains one of a handful of companies that can leverage its leading data, distribution and investments in AI to drive earnings power and tech leadership," he said in a note. Meta's revenue increased 26% in the last quarter, and the company said AI has helped improve its advertising algorithms. Nowak thinks the trend can continue and drive further revenue increases. Read: Meta's stock may actually be an overlooked AI winner. Why bulls say to buy the dip. Meanwhile, Broadcom's stock momentum is cooling in the wake of the company's earnings report last week, which left investors with questions about the specifics of its AI opportunity. TD Cowen analyst Joshua Buchalter said investors had gone into the earnings report last Thursday excited about Broadcom's blossoming relationship with OpenAI. But it was unclear from Broadcom's disclosures how that business is expected to translate into revenue and over what time period. Don't miss: Here's the latest mystery spooking Broadcom investors - but not analysts Buchalter added that investors were likely more disheartened by Broadcom's announcement of a fifth unnamed customer that it will deliver $1 billion of custom chips to late next year. That was less than what Wall Street was expecting in OpenAI contributions, leading some analysts to believe the mystery customer is a different player. But the uncertainty hasn't sat well with investors. Buchalter, for his part, said he doesn't think anything "material has changed" between Broadcom and OpenAI, and that the chip maker is not counting the project yet since it's still being figured out. As the work between the companies advances, he said Broadcom's backlog should "inflect meaningfully." -Britney Nguyen This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 12-15-25 1812ET