Broadcom Inc’s (NASDAQ:AVGO) $22 billion quarter still fell short of AI hype.

That’s the reality of today’s big tech companies, where shares can tank even when fiscal results are upbeat. Here’s what analysts are saying:

  • Benchmark analyst Cody Acree maintained a Buy rating, and lifted the price target from $485 to $545.
  • DA Davidson analyst Gil Luria reiterated a Neutral rating, while raising the price target from $375 to $400.
  • KeyBanc Capital Markets analyst John Vinh reaffirmed an Overweight rating, while taking the price target higher from $500 to $575.
  • JPMorgan analyst Harlan Sur maintained an Overweight rating, while raising the price target from $500 to $580.
  • Rosenblatt Securities analyst Kevin Cassidy reiterated a Buy rating and price target of $500.
  • Cantor Fitzgerald analyst C.J. Muse maintained an Overweight rating and price target of $525.

Check out other analyst stock ratings.

Benchmark: Broadcom's shares shed about 13% Wednesday after-hours despite the company reporting record quarterly results. Acree mentioned four reasons for the massive sell-off:

  • Although AI semiconductor guidance for the fiscal third quarter, at $16.0 billion, represented more than 200% year-on-year growth, it missed consensus of $17.2 billion.
  • Gross margin in the fiscal third quarter will contract by around 300 basis points (bps) sequentially as custom accelerators become a larger part of the mix.
  • The fiscal 2026 AI semiconductor outlook of $56 billion missed Street expectations of $57.5 billion.
  • The fiscal 2027 AI semiconductor framework remained at more than $100 billion, rather than an upward revision.

"We expect a further contributor to the stock’s weakness was management’s public acknowledgment that Google, Broadcom’s largest TPU customer, is expected to diversify its TPU supplier base as its own AI compute consumption expands," he said.

DA Davidson: Broadcom delivered another strong quarter with rising AI demand. However, Luria said that the company's modest revenue beat and constructive guidance "failed to meet elevated investor expectations."

Broadcom's revenue grew 48% year-on-year to $22.2 billion in the second quarter. It topped the consensus of $22.1 billion thanks to AI semiconductors and high demand for XPU and networking solutions. Management's outlook for Q3 reflects 84% year-on-year total revenue growth and 200% AI semiconductor revenue growth.

KeyBanc Capital Markets: Broadcom reported revenue of $22.2 billion, slightly higher than the consensus of $22.1 billion. Earnings of $2.44 per share topped consensus of $2.40 per share.

Management guided to third-quarter revenues of $29.4 billion, above consensus of $28.3 billion, Vinh said. The adjusted EBITDA guide for the quarter implies earnings of $3.20 per share, above Street expectations of $3.16 per share, he further noted.

JPMorgan: Broadcom reported strong results and announced its July quarter guidance ahead of Street expectations. The guidance reflects revenue growth of 84% year-on-year and AI semis revenue growth of more than 200%.

AI bookings rose to $30 billion versus $10.8 billion shipped, which significantly increases the backlog, "raising revenue visibility even further," Sur said. The earnings call increased confidence in Broadcom's growth over the next couple of years, AI compute buildout still being in early-innings and the company being "the most strategically entrenched provider of ASIC/XPU compute/networking," he added.

Rosenblatt Securities: Broadcom's revenue guidance for the third quarter was due to higher-than-expected software results, Cassidy said. AI revenue and guidance were roughly in-line with consensus estimates, while investors were expecting a beat, he added.

Moreover, management only reiterated its fiscal 2027 revenue outlook, which could "intensify investor concerns" around a potential market share loss to Taiwanese semiconductor maker MediaTek, the analyst stated. "Importantly, Broadcom's ASIC programs are developed through deep, multi-year customer engagements, which we believe provides strong longer-term revenue visibility into FY28 and beyond," he further wrote.

Cantor Fitzgerald: Although Broadcom reported a beat and raised its outlook, the print was "disappointing" and reflected "less precise execution than what we have come to expect," Muse wrote in a note.

He noted four reasons for the disappointment:

  • AI revenue outlook for the July quarter came at only $16 billion, versus the estimate of $17.1 billion.
  • Revenue outlook upside was driven by Infrastructure Software
  • Gross margin guide of 74% fell short of consensus of 76.8%
  • Management only reiterating AI revenues to exceed $100 billion in fiscal 2027, representing no increase from their outlook provided three months back.

AVGO Price Action: Shares of Broadcom had declined by 11.5% to $424 at the time of publication on Thursday.

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