Broadcom Stock Drops Over 10% After $16B AI Chip Forecast Miss
AVGO•Broadcom projected fiscal Q3 AI revenue of $16 billion, missing the $17.2 billion analyst consensus, and trimmed full-year AI chip sales guidance to $56 billion versus $57.6 billion estimates. Despite Q2 revenue rising 48% to $22.2 billion and EPS of $2.44 beating forecasts, shares plunged over 10% in after-hours trading.
1. Q2 Results and Stock Response
Broadcom reported second-quarter revenue of $22.2 billion, a 48% year-over-year increase, and delivered EPS of $2.44, modestly above analyst estimates. Despite the strong quarterly performance, the stock declined over 10% in after-hours trading as investors focused on forward-looking guidance.
2. AI Chip Revenue Guidance
For fiscal Q3 ending in July, management forecast AI semiconductor revenue of $16 billion, falling short of the $17.2 billion consensus. The company also lowered its full-year AI chip sales outlook to $56 billion, below the $57.6 billion estimate, signaling a slower ramp in AI buildouts.
3. Key AI Customer Agreements and Financing
Broadcom has secured long-term AI chip supply agreements with Google, Anthropic and Meta, with some demand set to span multiple years. To support expanded computing deployments, Broadcom formed financing partnerships with Apollo Global Management and Blackstone to enable over 20 GW of AI capacity for Anthropic and OpenAI through 2028.
