Broadcom’s $100B AI Forecast Fails to Impress Wall Street

Benzinga reported Wednesday that Broadcom’s Broadcom AI revenue forecast of more than $100 billion for fiscal 2027 failed to excite investors, sending shares down sharply despite a record quarterly performance.

Record Quarter, Muted Reaction

The company posted second-quarter revenue of $22.2 billion. That figure represents a 48% jump from the same period a year earlier. CEO Hock Tan stood firmly behind the chipmaker’s long-term targets, reiterating that AI semiconductor revenue would surpass $100 billion in fiscal 2027. Tan described the trajectory as clear and predictable. Yet shares of AVGO slid more than 11% in overnight trading following the announcement.

Visibility Stretches Into 2028

Tan offered unusually detailed forward guidance during the earnings call. He told analysts that customer order visibility, previously extending through 2027, now reaches into 2028. That extended backlog prompted JPMorgan analyst Harlan Sur to ask management whether an 18-month order book of $200 billion or more was a reasonable assumption. Tan did not directly confirm the figure. He instead pointed to plans to ship 10 gigawatts of AI infrastructure in 2027, describing the timeline as back-half weighted.

The Expectations Trap

Broadcom also guided for fiscal 2026 AI semiconductor revenue of roughly $56 billion. That would mark an approximately 180% increase over the prior year. Despite those milestones, analysts and traders had already built in the expectation of a formal upward revision to the 2027 target. When management chose to reiterate rather than raise the figure, the stock paid the price. The dynamic reflects a broader pattern across the AI chip sector, where even exceptional growth can disappoint markets priced for perfection.

Also Read: Nvidia’s AI Dominance Faces New Challengers as Custom Chip Market Grows

How AVGO Has Traded in 2026

Even after the post-earnings slide, Broadcom shares have significantly outpaced the broader market this year. AVGO has gained roughly 38% year-to-date, compared to a 21% advance for the Nasdaq 100 over the same stretch. The stock closed at $479.23 ahead of earnings. Over the past year, shares have risen approximately 87%, underscoring the sustained investor appetite for AI infrastructure plays despite short-term volatility.

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