Broadcom Stock Plummets Despite Record Q2 Results

Broadcom's stock price fell by about 15% on July 31 after the company reported record-breaking results for fiscal Q2 2026, including revenue and operating profit that exceeded expectations.

The company's AI semiconductor revenue grew by 143% year-over-year, with bookings exceeding $30 billion in the quarter. However, management chose to reiterate its fiscal 2027 AI revenue guidance of more than $100 billion, rather than raising it, which some investors saw as a sign that growth is decelerating.

This was compounded by three specific disclosures: Google's decision to multi-source custom chips from Broadcom and other suppliers, Alphabet's acknowledgement that it will likely draw on multiple custom chip suppliers, and the fact that Broadcom narrowed its offering to 'chips only' rather than fully integrated AI systems.