Broadcom Q2 AI revenue doubles to $10.8B; misses Q3 guidance, stock falls 15%

Broadcom reported fiscal Q2 2026 AI semiconductor revenue of $10.8 billion on June 3, up 143% year-over-year and beating its own $10.7B forecast, driven by custom accelerators and networking chips for Anthropic, Google, Meta, and OpenAI. Total Q2 revenue was $22.19 billion, up 48% YoY, matching record profitability with net income up 88% to $9.31 billion. However, the stock crashed 15% after-hours because CEO Hock Tan did not raise the company's full-year 2026 AI chip revenue guidance and Q3 AI guidance came in at $16 billion—below the $17.2 billion consensus estimate.

Tan reiterated the $100 billion+ AI revenue target for fiscal 2027, noting that Q3 AI revenue will grow over 200% YoY. He disclosed six core custom chip customers driving growth and pointed to long-term supply agreements extending into 2028, with Anthropic scaling from 1 gigawatt in 2026 to 3+ gigawatts in 2027 and OpenAI's first-generation XPU ramping to over 1 gigawatt in 2027. Broadcom will shift to "chips only" instead of complete integrated AI systems previously promised. The company's $20 billion free cash flow and strong cash position gave it room to invest in supply chain security.

For operators, Broadcom's revised guidance signals a temporary pause in hyperbolic acceleration—revenue growth is still double-digit, but investor expectations had front-run delivery timelines. The company's direct relationships with hyperscaler capex budgets and contracted gigawatt commitments extend visibility into 2027, making the near-term sell-off a valuation repricing rather than a demand signal. Watch Broadcom's next quarter for evidence that the 2027 $100B target is still on track.