Markets AVGO JUN 07, 2026

Broadcom sheds $300B as $16B AI chip guide misses $17.2B whisper, stock craters 15%

AVGO posted record Q2 revenue of $22.19B and AI chip sales of $10.8B, but Hock Tan's refusal to raise the $100B full-year AI target triggered the first revenue miss since December 2024.

BY HENLEY MARRAST · MARKETS DESK

Broadcom shed more than $300 billion in market capitalization on June 3 after guiding third-quarter AI semiconductor revenue to $16 billion, roughly $1.2 billion below the $17.2 billion figure analysts had been positioning for. Shares fell as much as 15% intraday and closed down 12%, the company’s first quarterly disappointment to land this hard since December 2024.

The print itself wasn’t the problem. Q2 fiscal 2026 revenue came in at $22.19 billion, up 48% year-over-year, a hair below the $22.27 billion LSEG consensus. Non-GAAP diluted EPS of $2.44 beat the $2.40 consensus by four cents. GAAP net income was $9.31 billion, adjusted EBITDA $15.24 billion at a 69% margin, free cash flow $10.26 billion. AI semiconductor revenue hit $10.8 billion, growing 143%, with six core custom-silicon customers now widely understood to include Google, Meta, OpenAI, and Anthropic.

What rattled the tape was what Hock Tan didn’t say. Q3 total revenue guidance of $29.4 billion topped the $28.53 billion Street estimate, and Tan projected Q3 AI revenue growth above 200% year-over-year. But he refused to raise the full-year AI target: “We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100 billion.” On the call, Tan also walked back earlier plans to deliver complete integrated AI systems, saying Broadcom would now sell chips only.

Reiteration, in a market priced for upward revision, reads as a downgrade. Infrastructure software at $7.18 billion also missed the $7.32 billion StreetAccount estimate, compounding the rotation.

The contagion was immediate. Micron dropped 7%, ARM Holdings 4%, and by June 4 the MSCI Asia Pacific index fell 1.6%, the KOSPI 1.8%, with Samsung and SK Hynix sliding 2% to 4% overnight. The S&P 500 finished at 7,585, off its recent record close of 7,609.78. Keybanc’s John Vinh called the pressure on Broadcom “warranted.”

The structural read is that the AI semiconductor trade has reached the phase where in-line guidance breaks the stock. The bar isn’t beating consensus anymore. It’s beating the whisper above consensus, every quarter, indefinitely.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.