Key Stats for Broadcom Stock
- Today’s Price Change: -4%
- Current Share Price: $249
- 52-Week High: $265
- AVGO Stock Price Target: $252
What Happened?
Broadcom (AVGO) stock is down 4% even though the chipmaker exceeded Wall Street expectations in fiscal Q2 and provided strong guidance for continued AI growth.
In the quarter ended in April, Broadcom posted adjusted earnings per share of $1.58, beating the consensus estimate of $1.57, while revenue reached a record $15.0 billion, slightly above the $14.97 billion expected.
More importantly, Broadcom delivered strong forward guidance, projecting third-quarter revenue of approximately $15.8 billion versus analyst estimates of $15.7 billion.
AVGO’s AI semiconductor business drove the top-line with $4.4 billion in revenue during the quarter, representing 46% year-over-year growth and marking the ninth consecutive quarter of strong AI-related growth.
CEO Hock Tan indicated the chip maker expects $5.1 billion in AI chip sales in the third quarter, up 60% year-over-year.
Management expressed confidence that Broadcom’s AI growth trajectory would continue through fiscal 2026, driven by increased demand for training and inference applications from hyperscale customers.
The semiconductor solutions segment generated $8.4 billion in revenue, up 17% year-over-year, while the infrastructure software business (including VMware) grew 25% to $6.6 billion, both beating analyst expectations.
See Broadcom’s full analyst estimates, earnings results, and earnings transcript (It’s free) >>>
What the Market Is Telling Us About AVGO Stock
Investors are clearly encouraged by Broadcom’s dominant position in the AI infrastructure buildout and its ability to sustain high growth rates in this critical market.
The 60% projected year-over-year growth in AI semiconductors for the third quarter demonstrates Broadcom’s competitive positioning in custom AI accelerators and networking components.
The sustainability of growth into fiscal 2026 is significant, as it suggests Broadcom’s hyperscale customers remain committed to their AI infrastructure investments despite economic uncertainties.
Moreover, the company’s networking portfolio, including its breakthrough Tomahawk 6 switch, is capturing market share as customers deploy larger AI clusters that require advanced connectivity solutions.
Broadcom’s success in converting VMware customers to subscription models has also created a stable, growing software revenue stream with superior margins.
With over 87% of Broadcom’s 10,000 largest customers now adopting VCF (VMware Cloud Foundation), the integration continues to drive strong cash flow generation.
The combination of accelerating AI demand, market-leading technology, and successful software integration positions AVGO stock well to capitalize on the ongoing digital transformation and AI adoption trends.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
