Overview
- Broadcom reported record fiscal Q2 revenue of about $22.2 billion and adjusted EPS of $2.44 while disclosing roughly $10.8 billion in AI semiconductor sales and more than $30 billion in new AI bookings.
- Following Thursday's results, management guided third‑quarter AI chip sales to about $16 billion and said consolidated gross margin would fall toward roughly 74 percent, a message that fell short of some analyst expectations.
- Investors punished the guidance with a one‑day share drop of roughly 12–16 percent, a decline that erased significant market value and pulled other semiconductor and AI‑hardware stocks lower.
- CEO Hock Tan outlined a strategic pivot from acquisition‑led growth to organic scaling of AI compute, announcing a plan to bundle Broadcom technology with outside capital and noting a first tranche of about $35 billion being launched by Apollo.
- Broadcom’s custom ASIC strategy creates strong customer lock‑in for hyperscalers by cutting power and per‑query cost, but the lower per‑chip margins mean the company must win sustained volume and long‑term contracts to offset margin pressure and meet its $100B‑plus AI revenue target for fiscal 2027.