Broadcom AI revenue jumps 221% but shares drop 5%

Broadcom reported $16.7 billion in AI semiconductor revenue, a 221% increase year over year and a 54% rise from the prior quarter, and total revenue of $29.59 billion. Adjusted earnings per share were $3.32. Shares fell about 5% in after-hours trading before recovering some ground.

Semiconductor revenue totaled $20.84 billion, putting AI chips and networking at more than half of Broadcom’s sales. The company guided to roughly $21.7 billion of AI semiconductor revenue and about $34.8 billion in total revenue for the current quarter.

Chief Executive Hock Tan raised the firm’s long-term projections. Management now expects about $115 billion of AI semiconductor revenue in fiscal 2027, up from a prior target above $100 billion, and a rise to roughly $230 billion in fiscal 2028.

Investor reaction reflected expectations for even larger numbers. StoneX analyst Cody Acree called the results “not enough to keep investors happy,” saying recent gains at other AI-chip leaders had reset market expectations for upside and the quarter’s beat and guidance did not meet that higher bar.

Some broker forecasts had modeled larger multi-year trajectories. One major bank modeled roughly $120 billion for fiscal 2027, while some investor discussions had targeted figures above $150 billion. Broadcom’s $115 billion forecast therefore improved on its prior outlook but remained below those more aggressive estimates. The company’s guidance for the quarter was slightly under the analysts’ consensus of about $35.0 billion, contributing to the stock reaction.

Competition and customer dynamics were also noted by market participants. Google has expanded work with Marvell, prompting questions about future TPU and adjacent chip spending. A JPMorgan analyst argued that concerns about Broadcom’s position with Google were overstated and pointed to Broadcom’s established relationship and ongoing involvement in future TPU generations. A BMO analyst ranked Broadcom behind only Nvidia among AI-chip suppliers and described the company as a leading provider of custom accelerators and networking.