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Broadcom AI Bets Soar, But Stock Stumbles
4 Jun
Summary
- Broadcom's AI semiconductor revenue surged 143% year-over-year.
- The company secured over $30 billion in AI semiconductor orders.
- New financing vehicle created for AI chip sales to large clients.
Broadcom reported robust quarterly earnings, with AI semiconductor revenue skyrocketing by 143% year-over-year to $10.8 billion in the second fiscal quarter of 2026. The company secured substantial AI chip orders exceeding $30 billion, indicating strong future demand. Despite these impressive figures and a positive outlook for the current quarter, Broadcom's stock saw a dip in after-hours trading as its guidance did not meet heightened market expectations for AI revenue.
To support major AI chip sales to clients like Alphabet, OpenAI, and Anthropic, Broadcom announced a new special purpose vehicle. This initiative, in partnership with Apollo and Blackstone, will provide necessary debt financing. Management reiterated its fiscal year 2026 AI semiconductor revenue target of $56 billion and a long-term goal of at least $100 billion by fiscal year 2027, with continued growth expected through fiscal year 2028.
