Broadcom just posted a quarter where AI semiconductor revenue nearly tripled year-over-year. The stock still cratered.
The chipmaker reported fiscal second-quarter 2026 revenue of $22.19B, missing analyst estimates of roughly $22.27B. Shares plunged more than 13% in extended and premarket trading on June 3-4, dragging Nasdaq futures down with them.
The numbers tell a contradictory story
Total revenue hit $22.19B, a 48% jump from the $15.0B the company posted in Q2 2025. AI-related semiconductor sales surged 143% year-over-year to $10.8B. Adjusted earnings per share came in at $2.44, beating the $2.40 consensus estimate. GAAP net income reached $9.31B.
The revenue miss itself was narrow, roughly $80M on a $22B top line. That’s a gap of about 0.4%.
Guidance is where it fell apart
Broadcom projected third-quarter revenue of approximately $29.4B. The AI chip revenue guidance of $16B for next quarter spooked investors, who had been modeling somewhere in the range of $16.36B to $17.2B.
CEO Hock Tan kept Broadcom’s 2027 sales forecast unchanged, adding to investor anxiety.
The Google problem and competitive pressure
Post-earnings commentary indicated that Google, one of Broadcom’s most important AI chip customers, may be looking to diversify its supplier base. Broadcom has carved out a niche designing custom AI silicon, known as ASICs, for companies like Google and Meta. There were also concerns about margin dilution as Broadcom expands its semiconductor product range.
Nasdaq futures dropped as traders reassessed the broader AI semiconductor thesis.
What this means for investors
Revenue grew 48% year-over-year. AI chip sales nearly tripled. EPS beat estimates. And the stock still dropped 13%.
The unchanged 2027 guidance is worth watching closely. If Broadcom raises that figure on the next earnings call, this sell-off will look like an overreaction. If it stays flat or gets revised downward, it would validate concern that AI infrastructure spending may not scale as linearly as current valuations assume.