AVGO shares fell sharply after reporting $22.19 billion in revenue and $10.8 billion in AI semiconductor sales, missing market expectations.
Broadcom reported fiscal Q2 revenue of $22.19 billion, up 47.9% year over year, with AI semiconductor revenue surging 143% to $10.8 billion. Despite the strong results, the stock plunged 12.59% on the day, extending losses to 13.78% for the week, marking its second-worst earnings reaction in nine quarters.
The company guided Q3 revenue to $29.4 billion, with $16 billion expected from AI, and reiterated its $100 billion AI revenue target for 2027. Bookings for AI semiconductors reached over $30 billion, supported by partnerships with major hyperscalers like Google, Meta, and OpenAI. Free cash flow hit $10.26 billion, or 46% of revenue.
Analysts noted the stock’s trailing P/E of 64 left little room for error, and even a modest earnings beat triggered a sharp selloff. The concentration of AI revenue among just six customers added to investor concerns about long-term stability.