After Broadcom (AVGO) held its 2026 earnings conference call, its stock price fell by about 12% in after-hours trading on June 4. Total Q2 revenue was $22.19 billion, and AI semiconductor revenue increased 143% year over year. However, its Q3 AI chip sales guidance was $16 billion, below analysts’ expectations of $17.2 billion, and Broadcom did not raise its 2026 AI semiconductor sales forecast.
Q2 Results and Specific Numbers in the Q3 Guidance
Q2 Total Revenue: $22.19 billion (above market expectations of $22.13 billion)
Q2 Earnings Per Share: $2.44 (above expectations of $2.39)
Q2 AI Semiconductor Revenue Year-Over-Year Growth: 143%
Q3 Total Revenue Guidance: $29.4 billion (above market expectations of $28.61 billion)
Q3 AI Chip Sales Guidance: $16 billion (below analysts’ expectations of $17.2 billion)
2026 AI Semiconductor Sales Forecast: Broadcom did not raise it
Hock Tan’s Statement on the Earnings Call: Reiterates an AI Semiconductor Revenue Goal of Over $100 Billion
CEO Hock Tan said on the earnings call: “We expect this momentum to continue through fiscal year 2027, and we reaffirm our expectation for AI semiconductor revenue to exceed $100 billion.” This reiterates the company’s long-term guidance for the scale of AI semiconductor revenue, but the fact that its third-quarter quarterly guidance remains below market expectations is still the core focus for the market. Broadcom’s customers include Google (GOOG, GOOGL), Meta (META), Anthropic, and OpenAI; spending in the AI space for hyper-scale data centers this year is expected to reach $650 billion.
CFRA Research Assessment: The Stock’s After-Hours Drop Backdrop
In the five trading days leading up to the earnings release, Broadcom repeatedly hit record highs, with investors having already priced in expectations for strong performance. Angelo Zino’s assessment pointed out that the high expectations ahead of the report were an important backdrop for the after-hours stock reaction. Broadcom’s after-hours stock price fell to $418.44, down 12.68% (after-hours quote time: 22:38:21 GMT-4).
Common Questions
How big is the gap between Broadcom’s Q3 AI chip guidance of $16 billion and market expectations?
Broadcom’s Q3 AI chip sales guidance is $16 billion, below analysts’ broad expectations of $17.2 billion, a gap of about $1.2 billion (about 7%). Broadcom did not raise its full-year 2026 AI semiconductor sales forecast.
Does Broadcom’s after-hours drop mean the results are weak?
Overall performance actually exceeded expectations: Q2 total revenue of $22.19 billion was above expectations, EPS was $2.44 above expectations, and Q3 total revenue guidance of $29.4 billion was also above market expectations of $28.61 billion. CFRA Research’s Angelo Zino said the stock reaction mainly reflects the extremely high market expectations before the earnings release, not any deficiency in the results themselves.
Which time period is the “AI semiconductor revenue of over $100 billion” goal reiterated by Hock Tan for?
Hock Tan reiterated the goal on the earnings call and said, “We expect this momentum to continue through fiscal year 2027,” but did not disclose the specific timing for achieving it. The figure Broadcom has currently confirmed is Q3 AI chip sales guidance of $16 billion.
