Broadcom reported a 9% year-over-year increase in Infrastructure Software revenues, reaching $7.2 billion in Q2 of fiscal 2026, driven by strong demand for VMware Cloud Foundation (VCF) 9.1, which enterprises are increasingly using for on-premises private clouds. The company projects revenues to accelerate to approximately $8.9 billion in Q3 of fiscal 2026—a 31% year-over-year increase. Meanwhile, annual recurring revenue grew 17% year over year in Q2, highlighting customer interest in AI and cloud modernization.
The deployment of VCF by Standard Chartered Bank aims to modernize its IT infrastructure across 54 markets, with nearly 70% of the infrastructure migrated. This shift is anticipated to enhance security and operational resilience for critical banking services. Broadcom is strategically positioning VCF as an AI operating platform, targeting increased customer spending on automation, security, and AI infrastructure management.
Looking ahead, Broadcom’s AI semiconductor revenues are expected to hit approximately $56 billion in fiscal 2026, reflecting a 180% increase year over year, driven by long-term agreements with major tech firms such as Google and Meta. As a critical part of the AI ecosystem, Broadcom aims to balance its revenue streams by leveraging both hardware and software capabilities.
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