Broadcom shares fall 14% after AI revenue guidance of $16 billion misses analyst expectations of $17.3 billion

Broadcom guided for third-quarter AI revenue of $16 billion, below analyst estimates of around $17.3 billion, and reiterated its fiscal 2027 AI revenue target of more than $100 billion. The company reported second-quarter revenue of $22.2 billion with AI revenue of $10.8 billion, surpassing its own forecast by $100 million.

Anthropic, previously expected to purchase full rack systems from Broadcom, is now procuring chips only—a shift that Baird estimates reduced fiscal second-half 2026 and first-half 2027 revenue by roughly $7 billion to $8 billion per period. Broadcom's largest custom silicon customer is shifting inferencing workloads (processing where AI produces answers) to Taiwan-based MediaTek.

Bank of America projects absolute AI growth at approximately 180% year-over-year in fiscal 2026 and nearly 100% in fiscal 2027, with earnings per share power exceeding $30 by 2030. Broadcom announced a special-purpose vehicle with Apollo Global Management and Blackstone targeting more than 20 gigawatts of AI compute capacity through 2028, with an initial tranche valued at $35 billion.