Broadcom $AVGO drops 12% after Q2 revenue miss offsets $10.8B AI sales
Original: Broadcom suffers $285bn rout as revenue outlook disappoints View original →
Broadcom $AVGO fell more than 12% after fiscal Q2 revenue missed estimates, turning a record AI quarter into a market-cap reset. CNBC market data tied the selloff to the revenue miss, while Broadcom’s SEC-filed Exhibit 99.1 reported Q2 FY2026 revenue of $22.187 billion, up 48% year over year, and non-GAAP diluted EPS of $2.44.
The primary release shows why the reaction was about expectations, not a weak business line. AI semiconductor revenue reached $10.8 billion, up 143% year over year and above management’s forecast. Broadcom said demand for custom AI accelerators and AI networking drove the increase. Total semiconductor solutions revenue was $15.009 billion, up 79%, while infrastructure software revenue was $7.178 billion, up 9%.
Guidance stayed large but did not satisfy a market priced for more. Broadcom guided Q3 revenue to approximately $29.4 billion, up 84% year over year, with non-GAAP operating income around 67% of projected revenue and adjusted EBITDA around 68%. The company also declared a $0.65 quarterly dividend payable June 30 to holders of record on June 22.
The sector read-through was immediate. CNBC reported the VanEck Semiconductor ETF lost more than 1%, Arm Holdings fell more than 4%, and Micron dropped close to 8% as investors reduced exposure to AI-linked stocks. The next watchpoint is whether Broadcom’s $16.0 billion Q3 AI semiconductor target, implying more than 200% year-over-year growth, is enough to rebuild confidence after the 12% stock move.
Not investment advice. Verify all figures with primary sources before acting.
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Broadcom $AVGO fell 15% on June 4 — its worst day since January 2025 — after Q3 AI chip guidance of $16B missed the $17.2B analyst estimate by $1.2B. Q2 FY2026 revenue of $22.19B and non-GAAP EPS of $2.44 both beat consensus, and full-year AI semiconductor guidance was left unchanged at 'in excess of $100B,' disappointing a market that had priced in a raise.