Broadcom reported fiscal second-quarter revenue of $22.19 billion, slightly under the $22.27 billion analysts had expected [1, 2, 3]. The company forecasted AI chip revenue of $16 billion for fiscal Q3, below analyst estimates ranging from $16.36 billion to $17.2 billion [1, 4, 3]. CEO Tan Hock Eng reaffirmed a long-term AI chip sales target of $100 billion in 2027, stating, "Nothing slows down what was estimated prior - they just didn’t raise it" [1].
Broadcom forecast fiscal year AI chip sales of $56 billion, below some estimates around $57.6 billion [4, 3]. Despite the near-term miss, the company’s Q2 AI semiconductor revenue grew 48% year-on-year to $10.8 billion, slightly exceeding forecasts [4, 2, 3].
Following the earnings report on June 3, Broadcom shares fell about 13-15% in after-hours trading — their largest drop since January 2025 [1, 4, 5]. The weak AI chip outlook contributed to a broader sell-off in the semiconductor sector on June 5, wiping out approximately $1.3 trillion in market value across chipmakers including Broadcom, Nvidia, Micron, and AMD [6].
The selloff came amid stronger-than-expected U.S. jobs data in May and mounting concerns about high tech valuations [6, 7]. Ryan Lee, senior vice president at Direxion, said, "Today’s miss on revenue and subsequent post-market pull back shows the market demands perfection for this chip rally to keep running" [1]. John Vinh of Keybanc Capital Markets described the share price drop as a reasonable short-term reaction but said he remained optimistic on the company [5].
Broadcom has signed long-term AI chip contracts with Google, Anthropic, and Meta, but investors raised concerns about quarterly revenue recognition under these deals [4, 3]. Dennis Dick, a trader at Triple D Trading, commented, "Blindly buying the dip had been winning you money, but that ended today" [6], while Wells Fargo’s Ohsung Kwon said the semiconductor sector was overbought, adding, "I don't think it's the end of the [semiconductor] bull market" [6].
Broadcom’s next fiscal quarter results and AI revenue guidance will be closely watched for signs of recovery or further downward revisions.
