U.S. stock futures moved lower on Thursday as investors took profits after a powerful rally to record highs, while disappointing market reactions to Broadcom's earnings weighed heavily on the technology sector.

The decline was led by semiconductor stocks after Broadcom fell more than 13% in premarket trading. Although the company reported strong results and continued to benefit from booming artificial intelligence demand, investors were disappointed that management maintained—rather than raised—its long-term forecast of $100 billion in AI-related revenue.

Broadcom's Outlook Fails to Impress Investors

Broadcom has been one of the biggest winners of the AI boom, with shares gaining nearly 55% during the current quarter. However, the market's expectations had become extremely high.

Despite continued growth in AI chip sales, investors were hoping for upgraded forecasts that would justify the stock's massive valuation. Instead, Broadcom simply reaffirmed its existing long-term targets, triggering a sharp selloff that could erase more than $270 billion in market value if losses persist.

The reaction highlights how demanding investors have become toward AI-related companies, where even strong results may not be enough to satisfy market expectations.

Chip Stocks Slide Across the Board

Broadcom's decline quickly spread throughout the semiconductor industry.

Major chipmakers traded sharply lower in premarket activity:

• Advanced Micro Devices fell between 4% and 7%
• Micron Technology dropped significantly
• Marvell Technology retreated after its recent rally
• Qualcomm also moved lower

The weakness pushed Nasdaq 100 futures down more than 1%, significantly underperforming broader markets.

Geopolitical Risks Return to Focus

Beyond technology stocks, investors are also monitoring renewed uncertainty surrounding the conflict between the United States and Iran.

Although a ceasefire was reached earlier this year, negotiations aimed at ending hostilities and reopening the strategically important Strait of Hormuz have made little progress.

The ongoing tensions have kept oil prices elevated, raising concerns that higher energy costs could reignite inflation pressures and complicate monetary policy decisions.

These risks come after an extraordinary run for U.S. equities, with the S&P 500 recently completing a streak of record highs and positioning for one of its strongest periods in decades.

Federal Reserve and Economic Data in Spotlight

Investors are also preparing for key economic data that could influence interest-rate expectations.

Weekly jobless claims figures are due ahead of Friday's closely watched employment report, which will provide a fresh snapshot of the health of the U.S. labor market.

Markets currently expect inflation pressures linked to energy prices to keep the Federal Reserve cautious, with traders assigning significant odds to another rate increase before year-end.

Comments from Fed officials, including Thomas Barkin and Mary Daly, are also expected to attract attention before the central bank enters its pre-meeting blackout period.

Other Market Movers

Outside the semiconductor sector, cybersecurity firm CrowdStrike fell more than 10% after reporting higher operating expenses during the first quarter.

Meanwhile, excitement is building around SpaceX, which is reportedly beginning an investor roadshow ahead of its planned public listing. The company is seeking to raise approximately $75 billion in what could become one of the largest IPOs in history, potentially valuing the company at around $1.75 trillion.

Market Outlook

The latest pullback appears driven more by profit-taking and valuation concerns than by a fundamental deterioration in economic conditions. However, elevated oil prices, geopolitical uncertainty, and increasingly demanding expectations for AI companies suggest that market volatility could remain elevated in the near term.

For now, investors remain optimistic about long-term AI growth, but Thursday's trading serves as a reminder that even the strongest market themes can face periods of consolidation after extended rallies.