Broadcom Shares Slide Despite Jump in 2Q Revenue on AI Chip Demand — Update

By Kelly Cloonan

Broadcom logged higher revenue in its latest quarter as demand for its artificial-intelligence chips accelerates, a trend the company sees continuing in the current quarter.

However, the semiconductor and software maker's shares slid 12% to $419.70 in after-hours trading, as the report and guidance failed to live up to lofty expectations among some investors. Through market close, the stock had climbed 38% year to date.

Broadcom, which helps hyperscalers like Google, OpenAI and Meta to design custom AI accelerator chips, said revenue jumped 48% in the second quarter. Chief Executive Hock Tan said the growth was driven by semiconductor revenue from AI, which more than doubled to $10.8 billion due to increasing demand for custom AI accelerators and AI networking.

Tan said that momentum has continued into the current quarter, forecasting AI semiconductor revenue will more than triple from the year-ago period to $16 billion. Still, the company left its prior outlook for 2027 unchanged, guiding for AI semiconductor revenue of more than $100 billion.

Tan said the company expects its AI semiconductor revenue growth to continue given trends with its six core customers. The company recently entered a long-term agreement with Google, one of its major customers, to develop and supply multiple generations of TPU chips and AI networking.

"It's a very, very strong agreement," Tan said during a call with analysts. "It's a commitment that is very substantial in dollars," he said, though added that the company expects Google will likely source from a variety of partners given the growth of consumption of AI compute and development.

Broadcom's second-quarter profit came in at $9.31 billion, or $1.91 a share, compared with $4.97 billion, or $1.03 a share, a year earlier.

Adjusted earnings per share were $2.44, compared with estimates of $2.40 a share according to analysts polled by FactSet.

Revenue climbed to $22.19 billion, compared with analyst estimates of $22.13 billion.

For the current third quarter, Broadcom forecasts overall revenue of $29.4 billion, compared with analysts' projection of $28.25 billion.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

June 03, 2026 19:22 ET (23:22 GMT)