AVGO · Broadcom Inc.

Broadcom delivered a standout Q2 FY2026, with consolidated revenue of $22,187 million (+48% YoY) exceeding expectations, primarily driven by a surge in AI-related semiconductor revenue. Semiconductor solutions revenue grew 79% YoY to $15,009 million, while infrastructure software rose 9% to $7,178 million. AI semiconductor revenue alone reached $10.8 billion, up 143% YoY, above management's forecast, reflecting robust demand for custom AI accelerators and networking. On a GAAP basis, net income rose 88% to $9,310 million ($1.91 diluted EPS), while non-GAAP net income increased 55% to $12,074 million ($2.44 diluted EPS). Adjusted EBITDA grew 52% to $15,244 million, representing a 69% margin, demonstrating significant operating leverage. Free cash flow was $10,262 million, or 46% of revenue, up 60% YoY. The balance sheet remains strong with $19.6 billion in cash.

Management commentary highlighted the AI-driven momentum. CEO Hock Tan noted that AI semiconductor revenue surpassed expectations and is expected to grow over 200% YoY to $16.0 billion in Q3. CFO Kirsten Spears emphasized the 48% revenue growth and stable non-GAAP operating margin of 67% in the guidance. For Q3 FY2026, Broadcom guided revenue of approximately $29.4 billion (+84% YoY), with non-GAAP operating income margin of ~67% and Adjusted EBITDA margin of ~68%. The company also declared a quarterly dividend of $0.65 per share, consistent with the prior quarter. The strong results and upbeat guidance underscore Broadcom's dominant position in AI infrastructure, with potential upside from continued AI adoption. Risks include global economic uncertainty and supply chain dependencies, but the current trajectory suggests sustained outperformance.