Broadcom’s Q3 AI revenue forecast of $16 billion fell short of analyst estimates, triggering a sharp sell-off despite strong Q2 results.
Broadcom Inc (NASDAQ:AVGO) shares plunged over 14% after its fiscal third-quarter AI revenue guidance of $16 billion missed analyst expectations of $17.3 billion. The company reiterated its 2027 AI revenue target of over $100 billion, a figure investors had already priced in at higher levels.
The chipmaker reported second-quarter revenue of $22.2 billion, slightly above guidance, with AI revenue reaching $10.8 billion, $100 million ahead of its forecast. Earnings per share hit $2.44, surpassing Wall Street estimates. Analysts attributed the conservative guidance to supply constraints rather than weak demand.
Bank of America analysts noted Broadcom’s AI growth remains on track for 180% year-over-year in fiscal 2026 and nearly 100% in fiscal 2027, with earnings per share potentially exceeding $30 by 2030. The stock decline reflected investor frustration over unchanged guidance despite strong order momentum.