June 3 - Broadcom missed Wall Street's second-quarter revenue expectations Wednesday, sending shares down more than 13% in extended trading. Revenue hit $22.19 billion, just below the $22.27 billion estimate, as competition in custom semiconductors from Nvidia and Marvell intensified.
Rival Marvell recently forecast its custom chip business would surpass $10 billion in revenue by 2029, signaling rapid market shifts. The rise of AI inference has made custom chips critical, driving demand but also raising the bar for performance and supply.
Despite supply chain pressure, Broadcom executives expressed confidence in securing supply through 2027. CEO Hock Tan said Q3 AI semiconductor revenue will grow over 200% year-over-year to $16 billion, though that figure fell short of the $16.36 billion analysts expected.
Still, Broadcom's core business remains strong. With hyperscale clients like Meta and Alphabet's Google, analysts view the company as well positioned. Big Tech is expected to spend over $700 billion on AI infrastructure this year, up from $400 billion in 2025. Tan noted plans to ship 10 gigawatts of compute capacity next year, with significant growth targeted for 2028.