Broadcom delivered one of its strongest quarters ever and still couldn’t satisfy investors, as the chipmaker’s shares tumbled sharply in extended trading on Wednesday after its closely watched artificial-intelligence forecast came in below the most aggressive analyst expectations.
The company reported fiscal second-quarter revenue of roughly $22.2 billion, a 48% jump from a year earlier and a record for the business. Adjusted profit landed at $2.44 per share, edging past Wall Street estimates. Adjusted EBITDA climbed 52% to about $15.2 billion, equal to nearly 70% of revenue, underscoring the unusually high margins Broadcom commands as it supplies custom silicon to the world’s largest technology platforms.
At the center of the report was AI. Semiconductor revenue tied to artificial intelligence reached $10.8 billion in the quarter, up 143% year over year and ahead of the company’s own projections. Broadcom said bookings for AI chips surpassed $30 billion, a figure executives pointed to as evidence of durable, multi-quarter demand. The company designs custom accelerators and networking gear for a small group of hyperscale customers, a roster that has reportedly grown to include Google, Meta, OpenAI and Anthropic.
The guidance, however, became the story. Broadcom told investors it expects AI semiconductor revenue to grow more than 200% year over year next quarter, to around $16 billion. While that would represent explosive expansion, it sat beneath the roughly $17 billion some analysts had penciled in, and momentum investors punished the gap. Shares fell as much as 12% after hours, erasing a meaningful slice of a stock that has been among the market’s biggest AI winners.
The reaction highlights a recurring dynamic for the sector’s leaders. Expectations have climbed so high that even triple-digit growth can disappoint when it undershoots the loftiest forecasts. Broadcom’s overall outlook remained robust, with total revenue for the current quarter guided to about $29.4 billion, an 84% annual increase, and operating margins holding steady.
Broadcom has transformed into one of the primary arms suppliers of the AI buildout, benefiting as cloud giants pour capital into data centers and increasingly design their own chips to reduce reliance on off-the-shelf processors. That custom-silicon business, paired with the company’s networking products, has driven a multiyear rally and lifted Broadcom into the ranks of the most valuable companies in the world.
The after-hours selloff also rippled through sentiment around other AI-linked names, a reminder of how tightly the broader market’s record run has been bound to a handful of semiconductor stories. Major U.S. indexes had touched fresh highs earlier in the week before pulling back.
For Broadcom, the quarter reinforced a striking reality: the company is growing at a pace few firms its size have ever sustained, yet its valuation now leaves little room for anything short of perfection. Investors will be watching whether the AI order book translates into the accelerating revenue management has promised, or whether the bar has simply moved out of reach.
