Broadcom Q2 Revenue Rises 48% to $22.19B, AI Guidance Falls Short
AVGO•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.
1. Q2 Financial Highlights
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.
2. Guidance and Market Reaction
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.
3. Margin and Customer Dynamics
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.
4. Future Outlook
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.
