Broadcom CEO drops unexpected message on AI and software

6 hours ago 1

There's a fearfulness softly spreading done endeavor bundle circles — that agentic AI is coming for the concern model. Why wage for bundle licenses erstwhile AI tin write, replace, oregon automate what that bundle does?

It's a morganatic question. And 65-year-old Broadcom (AVGO) CEO Hock Tan conscionable answered it with antithetic directness.

We're not seeing it.

Tan offered the remark during Broadcom's fiscal second-quarter net telephone connected June 3, according to a study compiled by Investing.com.

If anything, helium argued, the AI infrastructure roar is actively accelerating parts of the bundle business. VMware, successful particular, is seeing stronger request arsenic enterprises grow computing capableness to enactment AI workloads.

Tan wasn't unsocial successful that view. Earlier connected June 1, 2026, Nvidia (NVDA) CEO Jensen Huang pushed backmost connected what helium called the "Saaspocalypse" communicative astatine his Computex keynote successful Taiwan.

"A batch of radical person said, 'Jensen, AI is coming. Agentic AI is coming. Therefore, each of the bundle companies are going to spell retired of business,'" Huang said successful a The Wall Street Journal report. "I said it's precisely the opposite."

The net backing up Tan's assurance were remarkable.

Broadcom Inc. Q2 2026 results were historical

The Q2 fiscal 2026 numbers were genuinely bonzer by astir immoderate measure.

Key Broadcom Q2 2026 highlights:

Revenue: $22.187 billion, up 48% twelvemonth implicit twelvemonth (YoY)
AI semiconductor revenue: $10.8 billion, up 143% YoY, supra the company's ain forecast
Non-GAAP diluted EPS: $2.44, supra the statement estimation of $2.39
Adjusted EBITDA: $15.244 billion, oregon 69% of revenue, up 52% YoY
Free currency flow: $10.262 billion, oregon 46% of revenue, a grounds
Non-GAAP operating margin: 67.3%, up 200 ground points YoY
Source: Broadcom Inc. Q2 Fiscal Year 2026 Results and net telephone transcript

CFO Kirsten Spears called it plainly successful the institution statement: "Q2 consolidated gross grew 48% year-over-year to a grounds $22.2 billion. Adjusted EBITDA accrued 52% year-over-year to a grounds $15.2 billion."

And yet, aft the net time closed connected June 3, up 0.49% astatine $479.23, AVGO shares plunged 13% successful after-hours trading to $413.21, according to Yahoo Finance.

My reappraisal of the information suggests the market's absorption wasn't astir what Broadcom delivered, but astir what the Q3 guidance implied for the valuation mathematics astatine existent terms levels.