Broadcom Sinks 6% as BofA Flags $370 Billion AI Debt Risk and VMware Security Flaws Emerge

Broadcom shares fell as much as 6% on August 14, making the stock the biggest decliner in the S&P 500, with shares dropping to around $390.69 as two separate concerns hit investor sentiment simultaneously. Bank of America raised alarms over a $370 billion AI financing question surrounding the company's massive infrastructure buildout, while separate reports of security vulnerabilities in VMware products added further pressure. Wolfe Research framed the stakes bluntly, estimating that Broadcom's 14 gigawatts of planned capacity tied to OpenAI and Anthropic in 2028 could represent roughly $140 billion to $200 billion in revenue, compared with total consensus revenue of approximately $245 billion for that year, underscoring both the enormous opportunity and the concentration risk embedded in the AI financing arrangements.

The selloff drove heavy options activity, with 493,430 contracts changing hands representing roughly 49.3 million underlying shares, and the $400 August 2026 call leading volume. Despite the one-day slide, Wall Street's average price target sits at $527.88 against a recent quote near $417.82, implying about 26% upside, and at least one analyst argues the stock offers more than 60% potential gains. Broadcom's Q3 earnings report is due September 2, when its high-margin software segment is expected to post revenue growth of more than 30%.

Bridgewater Associates disclosed AVGO as a 2% position in its Q2 2026 13F filing, released the same day as the selloff.