Broadcom posted fiscal Q2 revenue of $22.19 billion, up 48% year-over-year, with AI chip sales reaching $10.8 billion, a 143% increase. The company guided $16 billion in AI semiconductor revenue for Q3 versus analysts’ $17.2 billion estimate, prompting a roughly 13% premarket share decline.
Broadcom reported fiscal second-quarter revenue of $22.19 billion, a 48% increase year-over-year, driven by AI semiconductor sales of $10.8 billion, up 143%. Adjusted earnings per share came in at $2.44, slightly above the $2.40 analysts had forecast.
For the current quarter, Broadcom set AI semiconductor revenue guidance at $16 billion, below the $17.2 billion consensus, triggering a premarket stock drop of about 13%. Broader semiconductor ETFs and peer chipmakers also traded lower on the setback in AI growth expectations.
CEO Hock Tan cautioned that the rapid growth in AI chip sales is diluting overall gross margins due to product mix shifts. He also noted that major customers like Google are likely to diversify orders across multiple chip suppliers, potentially intensifying competitive pressures.
Broadcom reiterated its full-year AI semiconductor revenue target of over $100 billion and projected total Q3 revenue of approximately $29.4 billion, surpassing the $28.25 billion street estimate. The semiconductor solutions segment contributed $15 billion, while infrastructure software added $7.18 billion.
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