Chipmaker maintained its $100 billion AI sales target, but investors were disappointed by the lack of a stronger long-term outlook.
Broadcom’s stock fell more than 13% in after-hours trading after the semiconductor company reported second-quarter revenue that came in slightly below Wall Street expectations and maintained its long-term AI sales forecast without raising guidance.
The company posted revenue of $22.19 billion for the quarter, narrowly missing analysts’ estimates of $22.27 billion. Broadcom also projected AI chip revenue of $16 billion for the current third quarter, slightly below market expectations of $16.36 billion.
Chief Executive Officer Hock Tan said the company now expects to ship more than 10 gigawatts of AI computing capacity by 2027, a modest increase from earlier projections. However, Broadcom left unchanged its forecast of generating $100 billion in AI-related chip revenue over the long term, disappointing investors who were anticipating a more ambitious outlook.
Industry analysts noted that the market had been expecting an upward revision to Broadcom’s AI growth targets. The absence of a forecast upgrade weighed on sentiment despite continued strength in demand.
Competition in the custom AI chip market is also intensifying. Companies such as Marvell Technology have been expanding their presence among hyperscale cloud customers, with Marvell recently projecting its custom chip business will exceed $10 billion in annual revenue by 2029.
Despite concerns about supply constraints across the semiconductor industry, Broadcom executives said the company has secured sufficient manufacturing capacity for both 2026 and 2027.
The company forecast third-quarter revenue of approximately $29.4 billion, exceeding analysts’ estimates of $28.54 billion.
Broadcom continues to benefit from surging AI infrastructure spending, particularly through its custom chip partnerships with major technology companies including Meta and Google. AI semiconductor revenue reached $10.8 billion in the second quarter, up 143% from a year earlier, driven by strong demand for custom AI accelerators and networking products.
