Broadcom Earnings Miss: AI Outlook Sends Shares Down

According to post-market reports on June 3, U.S. semiconductor giant Broadcom reported record-breaking fiscal Q2 2026 results, yet its shares plunged 15% in after-hours trading, reflecting a classic “buy the rumor, sell the fact” reaction.

The company posted revenue of $22.19 billion, up 48% year-on-year and setting a new historical high, with adjusted earnings per share of $2.44, slightly above market expectations of $2.40. Broadcom’s AI semiconductor segment stood out with $10.8 billion in revenue, a remarkable 143% increase year-on-year, solidifying its role as the key growth driver.

Despite these strong figures, the stock retreated. Total quarterly revenue fell slightly short of analysts’ forecast of $22.27 billion, while the infrastructure software business generated $7.18 billion, below the expected $7.32 billion.

The main trigger for the sell-off was the cautious guidance for future performance. Broadcom expects Q3 revenue of $29.4 billion, surpassing forecasts, but its AI chip revenue projection of $16 billion missed some analysts’ $17.2 billion expectations. Investors were further disappointed that CEO Hock Tan maintained the full-year AI chip revenue target at “over $100 billion,” without raising the outlook as anticipated.

Market analysts note that Broadcom’s stock has gained nearly 40% year-to-date, positioning its valuation at a high level and raising expectations for continued exceptional performance. As a result, even minor misses or the absence of a “surprise” upward revision triggered profit-taking. Additionally, management indicated that the AI networking business revenue share may decline from 40% to around 30% in the future, intensifying concerns over the sustainability of growth.