Broadcom (NASDAQ:AVGO) Releases Quarterly Earnings Results, Beats Expectations By $0.04 EPS

Broadcom (NASDAQ:AVGO) issued its quarterly earnings data on Wednesday. The semiconductor manufacturer reported $2.44 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $2.40 by $0.04, FiscalAI reports. Broadcom had a net margin of 38.85% and a return on equity of 42.88%. The business had revenue of $22.19 billion for the quarter, compared to the consensus estimate of $22.13 billion. During the same period in the previous year, the firm earned $1.58 EPS. The company’s quarterly revenue was up 47.9% compared to the same quarter last year.

Here are the key takeaways from Broadcom’s conference call:

• Broadcom posted record Q2 revenue of $22.2 billion, up 48% year over year, driven by strong AI semiconductor demand. Operating margin held at a record 67% and free cash flow reached a record $10.3 billion.
• AI semiconductor revenue hit a record $10.8 billion in Q2, and the company said bookings exceeded $30 billion, with visibility now extending into 2028. Management reiterated full-year AI semiconductor revenue of $56 billion and continued confidence in >$100 billion in fiscal 2027.
• Broadcom highlighted major long-term AI customer wins across Google, Anthropic, OpenAI, Meta, and other customers, with several multi-gigawatt deployments expected to ramp in 2027 and beyond. Management said these programs support durable AI growth and already include $6 billion of purchase orders to date.
• Infrastructure Software revenue rose 9% to $7.2 billion, with ARR growth of 17% year over year and strong demand for VMware Cloud Foundation 9.1. The new release is aimed at improving efficiency and supporting enterprise AI inferencing workloads across multiple CPU/GPU platforms.
• Management guided Q3 consolidated revenue to $29.4 billion, with AI semiconductor revenue expected to accelerate to $16 billion. However, gross margin is projected to decline to about 74% due to mix shift toward AI semiconductors and away from software, even as operating margin is expected to stay around 67%.

Broadcom Stock Performance

Shares of NASDAQ:AVGO opened at $418.91 on Friday. The company has a quick ratio of 1.73, a current ratio of 1.90 and a debt-to-equity ratio of 0.80. Broadcom has a 52 week low of $241.11 and a 52 week high of $495.00. The firm has a fifty day simple moving average of $394.88 and a two-hundred day simple moving average of $361.73. The stock has a market capitalization of $1.98 trillion, a P/E ratio of 69.82, a PEG ratio of 0.99 and a beta of 1.41.

Broadcom Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, June 30th. Shareholders of record on Monday, June 22nd will be given a dividend of $0.65 per share. The ex-dividend date is Monday, June 22nd. This represents a $2.60 annualized dividend and a yield of 0.6%. Broadcom’s dividend payout ratio (DPR) is 50.78%.

Key Broadcom News

Here are the key news stories impacting Broadcom this week:

• Positive Sentiment: Broadcom posted record Q2 revenue of about $22.2 billion, up 48% year over year, with non-GAAP EPS of $2.44 beating estimates and free cash flow remaining exceptionally strong. Broadcom Inc. Announces Second Quarter Fiscal Year 2026 Financial Results and Quarterly Dividend
• Positive Sentiment: AI semiconductor revenue more than doubled to $10.8 billion, reinforcing that Broadcom remains a key beneficiary of the AI infrastructure buildout. Broadcom Revenue Climbs on AI Chip Demand
• Positive Sentiment: Several analysts raised price targets after the report, including JPMorgan, Bank of America, Mizuho, and Benchmark, signaling that Wall Street still sees upside despite the selloff. Analyst price target updates
• Neutral Sentiment: Broadcom guided third-quarter revenue to roughly $29.4 billion, above consensus, and reiterated a long-term AI revenue target of more than $100 billion by fiscal 2027. Some investors viewed that outlook as solid, but not aggressive enough to justify the stock’s premium valuation. Reuters article on Broadcom revenue and AI outlook
• Negative Sentiment: AVGO sold off sharply because the company’s AI revenue guidance came in below the market’s loftiest expectations, sparking concerns that the AI trade may be cooling or that the stock had simply gotten too expensive. Broadcom: AI guidance gap reveals the cost of sky-high expectations
• Negative Sentiment: The selloff in Broadcom also dragged down other semiconductor names and weighed on the Nasdaq, showing that investors are repricing the broader AI chip group after the earnings report. Micron, Marvell, and Broadcom lead chipmakers’ premarket losses

Wall Street Analysts Forecast Growth

A number of analysts have commented on the stock. Mizuho upped their target price on shares of Broadcom from $480.00 to $530.00 and gave the company an “outperform” rating in a report on Thursday. Wells Fargo & Company reaffirmed an “overweight” rating and set a $545.00 price objective (up from $430.00) on shares of Broadcom in a research report on Thursday, May 14th. Morgan Stanley set a $502.00 target price on shares of Broadcom and gave the stock an “overweight” rating in a research note on Thursday. The Goldman Sachs Group reaffirmed a “buy” rating and set a $525.00 price target on shares of Broadcom in a report on Thursday. Finally, Deutsche Bank Aktiengesellschaft reiterated a “buy” rating and issued a $515.00 price target (up from $430.00) on shares of Broadcom in a research report on Thursday. One analyst has rated the stock with a Strong Buy rating, twenty-eight have given a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat.com, Broadcom currently has a consensus rating of “Moderate Buy” and an average target price of $490.13.

Insiders Place Their Bets

In other Broadcom news, insider S. Ram Velaga sold 8,000 shares of Broadcom stock in a transaction on Friday, April 10th. The shares were sold at an average price of $370.52, for a total transaction of $2,964,160.00. Following the completion of the transaction, the insider directly owned 57,932 shares of the company’s stock, valued at $21,464,964.64. The trade was a 12.13% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director Justine Page sold 2,018 shares of Broadcom stock in a transaction dated Wednesday, April 8th. The stock was sold at an average price of $353.00, for a total transaction of $712,354.00. Following the transaction, the director directly owned 18,164 shares of the company’s stock, valued at approximately $6,411,892. This represents a 10.00% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders sold 324,282 shares of company stock worth $106,425,249. 1.90% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the company. Pinnacle Financial Partners Inc. raised its holdings in shares of Broadcom by 3.0% in the 3rd quarter. Pinnacle Financial Partners Inc. now owns 53,093 shares of the semiconductor manufacturer’s stock valued at $17,516,000 after purchasing an additional 1,539 shares in the last quarter. Brighton Jones LLC lifted its holdings in Broadcom by 21.8% during the fourth quarter. Brighton Jones LLC now owns 29,683 shares of the semiconductor manufacturer’s stock worth $6,882,000 after buying an additional 5,322 shares during the period. Schnieders Capital Management LLC. boosted its position in Broadcom by 59.2% during the 2nd quarter. Schnieders Capital Management LLC. now owns 14,518 shares of the semiconductor manufacturer’s stock valued at $4,002,000 after acquiring an additional 5,400 shares in the last quarter. Sivia Capital Partners LLC increased its holdings in shares of Broadcom by 10.1% in the 2nd quarter. Sivia Capital Partners LLC now owns 12,693 shares of the semiconductor manufacturer’s stock valued at $3,499,000 after acquiring an additional 1,160 shares during the period. Finally, Revolve Wealth Partners LLC increased its holdings in shares of Broadcom by 10.4% in the 4th quarter. Revolve Wealth Partners LLC now owns 7,997 shares of the semiconductor manufacturer’s stock valued at $1,854,000 after acquiring an additional 756 shares during the period. 76.43% of the stock is currently owned by hedge funds and other institutional investors.

Broadcom Company Profile

Broadcom Inc (NASDAQ: AVGO) is a global technology company that designs, develops and supplies semiconductor and infrastructure software solutions for a broad range of markets. The company’s semiconductor business provides components and systems for wired and wireless communications, enterprise and cloud storage, networking and broadband access, serving original equipment manufacturers, cloud service providers, telecommunications carriers and industrial customers worldwide. Broadcom is headquartered in Irvine, California, and operates globally with research, development and sales organizations across North America, Europe and Asia.

On the semiconductor side, Broadcom’s portfolio includes system-on-chip (SoC) and application-specific integrated circuit (ASIC) solutions, radio-frequency and connectivity components, Ethernet switching and PHY devices, storage adapters and controllers, optical transceivers and other networking silicon.