Quick Read – Broadcom holds a near-monopoly on high-speed AI Ethernet switching, collecting revenue regardless of which hyperscaler wins the custom silicon race. – AVGO guides Q3 AI semiconductor revenue to $16 billion, a 200%+ year-over-year jump, while NVDA competes with the…
ry customers Broadcom serves. – Hock Tan projects over $100 billion in fiscal 2027 AI revenue, backed by a booking backlog extending visibility through 2028. – I keep hitting the buy button on Broadcom (NASDAQ:AVGO) for a simple reason: it is the rare AI story where the growth is already booked, the cash is already showing up, and I do not have to guess which hyperscaler wins the compute race. That last part is the whole thesis
My money keeps landing here because Broadcom holds a near-monopoly on high-speed AI Ethernet switching while acting as the primary beneficiary of hyperscalers moving away from general-purpose GPUs toward custom silicon. When Google, Meta, OpenAI, and Anthropic each commit to their own accelerators, Broadcom’s XPUs and switches sit on the bill of materials either way. The Receipts Behind the Conviction Q2 FY2026 revenue landed at $22.187 billion, up 47.9% year over year, with AI semiconductor revenue of $10.80 billion growing 143%.
Non-GAAP EPS of $2.44 extended the beat streak to 8 consecutive quarters. Free cash flow of $10.262 billion converted at 46% of revenue, and adjusted EBITDA margin hit 69%. Cash on the balance sheet more than doubled year over year to $19.628 billion.