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Broadcom (NASDAQ: AVGO) reported a 20% revenue increase in its fiscal second quarter results, totaling $15 billion, driven in part by a 46% rise in AI-related revenue to $4.4 billion. Despite this growth, the stock slipped, albeit still up over 75% year-over-year. Adjusted earnings per share soared 44% to $1.58, exceeding analyst expectations of $1.56.
CEO Hock Tan anticipates continued strong revenue from AI semiconductors, projecting growth of 60% in fiscal Q3, totaling $5.1 billion, and implying over $30 billion by fiscal 2026. AI networking revenue surged 170% year-over-year, contributing 40% of total AI revenue. Broadcom’s forecast for fiscal Q3 includes a 21% revenue increase to $15.8 billion, buoyed by semiconductor and infrastructure software revenue gains.
Broadcom’s operations produced nearly $6.6 billion in cash flow, with approximately $9.5 billion in cash at quarter-end, alongside $67.3 billion in debt primarily due to its acquisition of VMware. Despite recent stock performance, analysts highlight ongoing opportunities in custom AI chips, particularly as major customers plan to deploy 1 million AI chip clusters by 2027.
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