Broadcom Holds $100B AI Forecast as Shares Plunge 13% on Q2 Results
AVGO•Broadcom held its fiscal 2027 AI revenue forecast at $100B, sending shares down 13% despite Q2 revenue of $22.2B and AI semis revenue up 143% to $10.8B. It guided Q3 revenue at $29.4B above consensus but set AI chip revenue at $16B below the $17.2B street forecast.
1. Q2 Financial Performance
Broadcom reported fiscal second-quarter revenue of $22.2 billion and EPS of $2.44, while AI semiconductor revenue surged 143% year-over-year to $10.8 billion.
2. AI Forecast and Share Reaction
Management reiterated its fiscal 2027 AI revenue goal of $100 billion, which led to a more than 13% drop in shares in premarket trading as investors had expected an upward revision.
3. Third-Quarter Guidance
For the current quarter, Broadcom projected revenue of approximately $29.4 billion, topping consensus estimates near $28.6 billion, but set AI chip revenue at $16 billion, falling short of the $17.2 billion analyst forecast.
4. Analyst Perspectives
Bernstein raised its price target to $550, citing potential lumpy AI revenue and a pause in shares, while Bank of America lifted its target to $530, highlighting extended visibility into customer demand through 2028 including Anthropic, Meta and OpenAI.
