Open this photo in gallery:
A Broadcom sign in San Jose in September, 2025. Shares of the Palo Alto, California-based company fell more than 2% in extended trading.Brittany Hosea-Small/Reuters
Broadcom AVGO-Q forecast third-quarter revenue above Wall Street expectations on Wednesday, betting on robust demand for its custom AI chips and networking gear.
However, shares of the Palo Alto, California-based company fell more than 2 per cent in extended trading. They had gained nearly 8 per cent last week in the run up to earnings.
Broadcom has cemented its position as a key beneficiary of the AI race, developing custom chips for hyperscalers such as Meta and Alphabet’s Google as an alternative to the pricey, power-hungry Nvidia processors that dominate the market.
Broadcom forecasts second-quarter revenue above Wall Street estimates
As the AI industry evolves rapidly, machine learning capabilities and requirements vary greatly from company to company, resulting in large cloud companies building their own processors to slash costs and personalize workloads.
Revenue is expected to the third quarter, compared with analysts’ average estimate of US$28.54-billion, according to data compiled by LSEG.
“In Q3 we expect semiconductor revenue from AI to grow over 200 per cent year-over-year to US$16.0-billion,” CEO Hock Tan Said.
In the second quarter, revenue rose 48 per cent to US$22.19-billion, slightly missing estimates of US$22.27-billion. Adjusted profit came in at US$2.44 per share, trailing estimates of US$2.40.
