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Broadcom (AVGO) reported a first-quarter fiscal 2026 gross margin of 77%, down from 77.9% in the previous quarter and 210 basis points lower year-over-year. Despite a 30 basis point increase in Semiconductor Solutions gross margins, the overall decline was attributed to an unfavorable product mix. Notably, the company expects a second-quarter gross margin to remain at 77%, while Semiconductor revenues are projected to reach $14.8 billion, marking a 76% year-over-year growth.
In the first quarter, Broadcom experienced a remarkable 106% surge in AI revenues, totaling $10.7 billion, with AI networking revenues expected to accelerate even further in the second quarter. The company anticipates total revenues for Q2 to be around $22 billion, reflecting a 47% increase from the previous year.
Broadcom faces stiff competition from Advanced Micro Devices (AMD) and NVIDIA (NVDA). AMD reported a 39.4% increase in Data Center revenues, reaching $5.38 billion, while NVIDIA’s Data Center revenues surged 75% year-over-year to $62.31 billion. Broadcom shares have declined 15.2% year-to-date, underperforming the tech sector’s 11.5% drop.
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