Broadcom Slips, Lululemon Falls, American Eagle Soars
Sep 4, 2025
In this discussion, Broadcom's shares took a hit as its lackluster revenue forecast fell short of investor expectations, even amidst the AI hype. Meanwhile, Lululemon faced a steep decline due to disappointing earnings and lowered growth projections. In contrast, American Eagle soared, credited for a strong recovery backed by a successful ad campaign. The episode offers insights into these contrasting fortunes and highlights critical developments in the market that every savvy investor should know.
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insights INSIGHT
AI Enthusiasm Is Normalizing
Broadcom's results showed growth but signaled normalization of AI-driven enthusiasm among investors.
The company beat estimates yet guidance left traders tepid as demand becomes better understood.
insights INSIGHT
Execution Issues Hit Lululemon Hard
Lululemon's management openly criticized its own execution and product assortment as sales lagged in the U.S.
The company cut revenue and EPS guidance, signaling deeper domestic weakness despite growth elsewhere.
insights INSIGHT
Geographic Split Masks Problems
Lululemon faces a U.S. revenue decline while expecting strong China growth of 20–25%.
U.S. markdowns rose and the U.S. accounts for two-thirds of revenue, amplifying the impact.
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- Broadcom (AVGO) shares slipped after the chip supplier delivered a revenue forecast for the current period that failed to impress some investors, a sign they were anticipating a bigger payoff from the AI boom. Sales will be about $17.4 billion in the fiscal fourth quarter, which runs through October, the company said in a statement Thursday. Analysts had projected $17.05 billion on average, though some estimates topped $18 billion, according to data compiled by Bloomberg. Expectations were high heading into the earnings report. Broadcom shares more than doubled since hitting a low in April, adding about $730 billion to the company’s market value and making them the third-best performer in the Nasdaq 100 Index.
- Lululemon (LULU) shares fell sharply after its latest earnings report showed the yogawear retailer is struggling to pull out of a sales slump after years of rapid growth. The company slashed its outlook, projecting sales in the range of $2.47 billion to $2.5 billion for the third quarter, lower than Wall Street had anticipated. For the full year, Lululemon lowered its earnings per share outlook to $12.77 to $12.97, down from as much as $14.78. The retailer also reduced its outlook for full year net revenue, now expecting it to be between $10.85 billion and $11 billion, down from as much as $11.3 billion projected in the first quarter. Shares of Lululemon fell more than 13% at 4:20 p.m. in New York on Thursday. “We are disappointed with our U.S. business results and aspects of our product execution,” Chief Executive Officer Calvin McDonald said in a statement.
- American Eagle (AEO) shares soared after the apparel company reported higher-than-expected quarterly sales and cited the success of its marketing campaign featuring Sydney Sweeney. “In just six weeks, the campaign has generated unprecedented new customer acquisition,” Chief Marketing Officer Craig Brommers said in a call with analysts. He said the company gained new shoppers in “every single county in the US” and saw sellouts of Sweeney’s signature jeans. “This momentum is national and it is pervasive,” he said.
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