(Reuters) - Broadcom ( AVGO ) shares fell nearly 4% in premarket trading on Friday, after the company's third-quarter revenue forecast failed to impress investors who have been extremely bullish on chip stocks amid an artificial intelligence boom.

The Palo Alto, California-based company, which supplies semiconductors to Apple and Samsung, provides advanced networking gear that allows vast amounts of data to travel across AI data centers, making its chips crucial for the development of generative AI technology.

Broadcom ( AVGO ) forecast third-quarter revenue of around $15.80 billion, compared with analysts' average estimate of $15.71 billion, according to data compiled by LSEG.

"High expectations drove a bit of downside," Bernstein analyst Stacy Rasgon said in a note.

Broadcom ( AVGO ) also helps design custom AI processors for large cloud providers, which compete against Nvidia's pricey off-the-shelf chips.

Global chipmakers, including Nvidia, have been vulnerable to U.S. President Donald Trump's shifting trade policy and export curbs as Washington attempts to limit Beijing's access to advanced U.S. technology.

"AVGO is ramping two additional customers, but they are still small. So the processor business will grow this year, but at a measured rate," said Morgan Stanley.

Last week, rival Marvell Technology ( MRVL ) forecast second-quarter revenue above Wall Street estimate, betting on strong demand for its custom chips powering AI workload in data centers.

Broadcom's ( AVGO ) valuation had crossed $1 trillion for the first time in December after it forecast massive expansion in demand for chips that power AI. Its shares have risen about 12% so far this year.

It has a 12-month forward price-to-earnings ratio of 35.36, compared with Marvell's ( MRVL ) 20.63, according to data compiled by LSEG.