Quick overview

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Broadcom shares fell by the greatest amount in over 16 months. AI semiconductor revenue for the fiscal third quarter ending in July will be $16 billion, significantly less than the average of $17.2 billion predicted by analysts.

Broadcom will sell $56 billion worth of AI chips in the fiscal year that ends in October, according to CEO Hock Tan, falling short of projections. Although the company is making progress in shifting to AI clients, it is up against excessive investor expectations.

AI optimism drove Broadcom’s market value to increase by about $270 billion over the five trading sessions before the earnings report. In light of this, the stock experienced its largest single-day decline since January 2025, falling 13% to $418.91 at Thursday’s close in New York. This year, the stock has still increased by 21%. Broadcom has expanded and signed contracts.

The stock experienced its largest single-day decline since January 2025, falling 13% to $418.91 at Thursday’s close in New York. This year, the stock has still increased by 21%. Long-term agreements with businesses like Alphabet Inc. have been signed and expanded by Broadcom. Google, Meta Platforms Inc., and Anthropic PBC.

However, it is still unclear how much revenue will be recorded in each quarter as opposed to being recorded in a multiyear backlog. According to Broadcom, total revenue for the period ending in July will be roughly $29.4 billion. Although the average estimate from analysts was $28.6 billion, some estimates were billions of dollars higher.

Sales increased 48% to $22.2 billion in the second fiscal quarter that concluded on May 3, which was marginally less than anticipated. With certain items excluded, earnings increased to $2.44 per share. This contrasted with a $2.39 estimate. Revenue from AI semiconductors was $10.8 billion, slightly more than the average estimate of $10.7 billion. Custom accelerators, or the chip, fall under that category.