June 4 (Reuters) - Broadcom ( AVGO ) shares sank about 12% in premarket trading on Thursday, a day after the company missed quarterly revenue views and disappointed investors' lofty expectations of stronger momentum from the AI boom.

The chipmaker could lose more than $285 billion in market cap at the current price of $418.83, if losses hold.

Broadcom ( AVGO ) vies with Nvidia ( NVDA ), whose graphics processors remain the gold standard for AI workloads, underscoring intensifying competition at the top of the AI chip market.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the selloff reflects "a classic case of very high expectations meeting a market that wanted perfection," adding that investors are punishing results that fall short of what they wanted.

Broadcom ( AVGO ) Chief Executive Officer Hock Tan, meanwhile, nudged up shipment forecasts to more than 10 gigawatts of AI chips in 2027, while sticking to the company's long-term target of $100 billion in AI revenue.

TD Cowen analysts said reiterating previously ambitious AI revenue targets without raising them in a market expecting "material beats and raises" is likely to disappoint investors, adding the quarter leaves "lingering questions" around execution and ramp timelines.

Surging memory chip prices due to a supply crunch have strained the broader industry. However, the company's executives said Broadcom ( AVGO ) is "very comfortable," having secured supply for 2026 and 2027.

Investor sentiment was also dented by Broadcom's ( AVGO ) downbeat outlook for third-quarter AI chip revenue, reinforcing concerns that while demand remains strong, growth may not be ramping as quickly as markets had anticipated.

Competition is also heating up as rivals such as Marvell Technology ( MRVL ) expand their custom chip businesses and deepen ties with hyperscaler clients.

Marvell ( MRVL ) shares were down about 4%.

Broadcom's ( AVGO ) core business remained strong, with AI semiconductor revenue rising 143% year-on-year to $10.8 billion in the quarter.

The stock trades at 29.90 times its forward earnings estimates compared with Marvell's ( MRVL ) 61.70 multiple and the broader S&P 500 index's 27.94, according to LSEG data.