Broadcom Stock Slides 12% From Friday’s High

Shares of Broadcom Corp., the leading U.S. maker of cable-modem computer chips, fell 12% after the stock reached a record high Friday.

Broadcom fell $22 to $157.25 in trading of 1.7 million shares, more than twice its three-month daily average. The shares had nearly doubled from Dec. 1 to Friday.

The Irvine company’s price-earnings ratio has risen to more than 120 times estimates for next year, several times the estimates for most communications-semiconductor companies, Needham & Co. analyst David Wong said. “With these high valuations, it doesn’t surprise me that there could be sudden downward moves in Broadcom’s stock,” said Wong, who has a “hold” rating for the company. “Broadcom is an excellent company, but it’s very difficult to call which way the stock is going to move because of the valuation.”

William Ruehle, Broadcom chief financial officer, said the company does not comment on movements of its stock price.