Broadcom could be headed for one of the worst 1-day destructions in shareholder value ever
Broadcom ( AVGO ) investors should have known it was going to be a Black Thursday when sharp-tongued CEO Hock Tan started his earnings call by reading last year's numbers off a piece of paper. "Well, in Q2, revenue was a record $15 billion as we grew 79% year-on-year. Driving th
Broadcom ( AVGO ) investors should have known it was going to be a Black Thursday when sharp-tongued CEO Hock Tan started his earnings call by reading last year's numbers off a piece of paper.
"Well, in Q2, revenue was a record $15 billion as we grew 79% year-on-year. Driving this growth was AI semiconductor revenue at a record $10.8 billion, up 143% — well, let me restart, guys," Tan said to begin the call on Wednesday afternoon. "Thank you, Ji. Thank you, everyone, for joining today. In our fiscal Q2 2026, total revenue reached a record $22.2 billion, up 48% year-on-year, above our guidance on strength in AI semiconductors."
Oops! The artificial intelligence stock, which had run up close to 40% year to date ahead of the results, had the same vibe.
The analysis: Broadcom faced high expectations for its earnings after strong upside surprises from other AI plays in recent weeks, like Dell ( DELL ), Hewlett Packard Enterprise ( HPE ), Cisco ( CSCO ), and Snowflake ( SNOW ).
The company had a mixed report compared to the Street's jacked-up estimates, however.
Broadcom reported revenue of $22.19 billion, modestly exceeding the consensus estimate of $22.13 billion. But it fell short of whisper numbers on Wall Street. Earnings per share came in at $2.44, topping estimates of $2.39.
Semiconductor revenue from artificial intelligence in the second quarter grew 143% year over year. However, AI chip sales for the third quarter were projected at $16 billion, below analysts' estimates of $17.2 billion, Yahoo Finance's Ines Ferré reports .
"Not as good as we hoped, but thesis unchanged," HSBC analyst Frank Lee wrote in a note.
