Broadcom $AVGO drops 12% after Q2 revenue miss offsets $10.8B AI sales

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.