Investors are selling off Semis before AVGO earnings?

Several of today's semiconductor earnings reports show that the market has become more demanding of semiconductor companies, and some potential problems can be seen in the $Marvell Technology(MRVL)$ earnings report:

• Excellent performance in the current quarter, and guidance exceeded expectations

• Too single source of incremental volume: while AI drives certainty, weakness across the board except for data centers, e.g., enterprise networking revenue of $171m (-35% yoy), carrier infrastructure of $106m (-38% yoy), consumer electronics of $89m (-38% yoy)

• Rising inventory days: current inventory levels can support 2-3Q demand, if AI order growth slows it will trigger inventory impairment risk;

• The market previously expected too high, has overdrawn the positive.

The 14% after-hours plunge is a shift in sentiment.

• Investors have now become quite sensitive and relatively "nervous" about AI-related stocks;

• Hedge funds are also looking for any reason to reduce their exposure and positions in AI, hardware, optics, and other areas.

This follows similar problems with similar semiconductor companies. $ON Semiconductor(ON)$ $Credo Technology Group Holding Ltd(CRDO)$

Right now it's obviously not good news for $Broadcom(AVGO)$ either, after all he was the first to start hyping the ASIC chip concept.

For AVGO, there's even more uncertainty:

• Highly rely on $Apple(AAPL)$ and China, coupled with new tariffs and export controls, poses significant risks to future revenues.

• Despite strong EPS and revenue expectations, potential cancellations of key contracts and geopolitical retaliation could lead to a 30% drop in share price.