The chipmaker crushed analyst estimates across the board, but Wall Street had already baked in the good news.
Broadcom just posted the kind of quarter most companies would frame and hang on the wall. Record revenue, earnings beats, AI chip sales nearly tripling. The stock dropped 4%.
The numbers that should have been enough
Broadcom reported fiscal second-quarter 2026 revenue of $22.19 billion, a 48% jump from the same period last year. That topped the Wall Street consensus estimate of roughly $22.13 billion. Adjusted earnings per share landed at $2.44, edging past the $2.40 analysts had penciled in.
The real headliner was AI semiconductor revenue, which hit $10.8 billion for the quarter. That’s a 143% increase year-over-year, right in line with the company’s own guidance of $10.7 billion. For context, Broadcom’s AI chip revenue in the prior quarter (Q1 FY2026) was $8.4 billion, which itself represented 106% growth.
Shares initially plunged nearly 8% before recovering to a roughly 4% decline.
The AI pipeline keeps getting bigger
CEO Hock Tan projected AI semiconductor revenue north of $16 billion in the fiscal third quarter. If that number holds, it would represent approximately 200% growth year-over-year.
Broadcom is targeting over $100 billion in annual AI chip revenue by the end of 2027. The company just reported $10.8 billion in a single quarter.
Broadcom’s client list includes Google, Meta, Anthropic, and OpenAI. The company’s AI-related backlog exceeded $70 billion as of the first fiscal quarter of 2026.
What this means for investors watching the AI trade
The jump from $8.4 billion in Q1 AI revenue to $10.8 billion in Q2, and the projection of $16 billion for Q3, suggests demand is accelerating. The $70 billion-plus backlog provides revenue visibility that extends well beyond the next earnings cycle, meaning Broadcom’s growth story isn’t dependent on winning new contracts quarter to quarter.
Investors should watch two things closely in the coming quarters. First, whether Broadcom’s AI revenue growth rate continues to accelerate or begins to plateau. Second, whether the $100 billion annual revenue target by 2027 gets adjusted, reaffirmed, or quietly walked back.
