Broadcom’s AI Chip Demand Fuels Record Q2, Lifts AI Revenue Outlook Toward $100B by 2027
Broadcom posted a record Q2 revenue of $22.2 billion, up 48% year over year, with a 67% operating margin and $10.3 billion in free cash flow. AI semiconductors led the growth, delivering $10.8 billion in AI revenue (up 143%), prompting a stronger outlook: Q3 AI semiconductor revenue of $16 billion and full-year AI revenue of about $56 billion, with AI revenue potentially exceeding $100 billion in fiscal 2027. Networking remains a key AI driver (about 40% of AI revenue in Q2, expected to normalize toward 30%), while Infrastructure Software rose 9% to $7.2 billion and VMware Cloud Foundation 9.1 gained traction. Gross margin was 77.1%, cash on hand rose to $19.6 billion, and free cash flow was $10.3 billion. For Q3, Broadcom guided revenue of $29.4 billion with roughly 74% gross margin and about 67% operating margin (~68% EBITDA). CFO Kirsten Spears will retire mid-June; Amie Thuener will become CFO. The company highlighted long-term AI partnerships with Google, Anthropic, OpenAI, and Meta as part of sustained AI data-center demand.
