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Fact Summary
Broadcom is a fabless semiconductor company operating two business segments, Semiconductor Solutions and Infrastructure Software, and reported Q2 FY2026 results (announced 2026-06-03) with revenue of $22.2 billion (YoY +48%) and AI semiconductor revenue of $10.8 billion (YoY +143%). The FY2026 annual AI semiconductor revenue guidance is $56.0 billion (YoY +180%). On 2026-07-08, it signed a custom silicon and wireless connectivity supply agreement with Apple worth over $30.0 billion through 2031, and on June 24 unveiled the jointly developed inference chip 'Jalapeño' with OpenAI.
Price-Change Context Note
On 2026-06-04, the day after the Q2 earnings announcement, the stock fell approximately 12% on a closing-price basis, reportedly because the Q3 AI semiconductor revenue guidance ($16.0 billion) fell short of analyst consensus ($17.2 billion, C). The 2026-07-16 close fell -5.03% from the prior close of $394.28 to $374.45, though no specific trigger for that day's decline was identified. During the same period, China's directive to phase out VMware software and the US shift to case-by-case review for semiconductor export controls to China were also reported as related background, given the company's revenue exposure to the Greater China region (approximately 17–18% of revenue).
Business Overview
Broadcom is a fabless semiconductor company operating two business segments: Semiconductor Solutions and Infrastructure Software (fiscal year November–October). As of FY2025 (fiscal year ended 2025-11-02), Semiconductor Solutions revenue was approximately $44.0 billion (approximately 69% of total), and Infrastructure Software revenue was approximately $19.9 billion (approximately 31% of total) (A).
Basis: FY2025 (fiscal year ended 2025-11-02) revenue composition (A) · Source: Broadcom FY2025 earnings release (2025-12-11)
Key Custom AI Accelerator (XPU) Customers
| Customer | Use | Confirmation Status |
|---|---|---|
| Google (Alphabet) | TPU v5/v6 ASIC design | Confirmed (public) |
| Meta | MTIA (Meta Training and Inference Accelerator) | Confirmed (public) |
| Anthropic | Custom XPU | Confirmed (executive mention) |
| OpenAI | Co-developed custom inference chip 'Jalapeño' | Confirmed (joint announcement 2026-06-24) |
| ByteDance | Custom XPU | Confirmed (public) |
| Apple | Custom silicon and wireless connectivity supply (over $30 billion through 2031) | Confirmed (contract announced 2026-07-08) |
Not available: Details of two undisclosed customers beyond the six listed above
5-Year Financial Trend
| Fiscal Year | Revenue ($100M) | Operating Margin | Net Margin | Diluted EPS |
|---|---|---|---|---|
| FY2021 | 274.5 | 31.0% | 24.5% | $1.50 |
| FY2022 | 332.0 | 42.8% | 34.6% | $2.65 |
| FY2023 | 358.2 | 45.2% | 39.3% | $3.30 |
| FY2024 | 515.7 | 26.1% | 12.0% | $1.23 |
| FY2025 | 638.9 | 39.9% | 36.2% | $4.77 |
The decline in FY2024 net margin and EPS reflects a GAAP accounting effect from VMware acquisition-related intangible asset amortization (approximately $8.0 billion annually) (A). Source: StockAnalysis.com, Broadcom FY2025 earnings release (2025-12-11)
Competitive Landscape
| Area | Broadcom Position | Key Competitors |
|---|---|---|
| Custom AI Accelerators (XPU) | Leader (6 publicly confirmed customers) | Marvell, Qualcomm, Intel |
| Data Center Ethernet Switches | Estimated #1 share (approximately 50–60%) | Marvell, Intel, Cisco, NVIDIA |
| Server Virtualization / Cloud Infrastructure (VMware) | #1 in enterprise | Nutanix, Red Hat, Microsoft |
Valuation (Factual Multiples)
As of 2026-07-16 (closing price $374.45) · Source: StockAnalysis.com (2026-07-17 data), SEC EDGAR 8-K
The 12-month average P/E is approximately 78.9x, and the current P/E of 62.3x is approximately -21.8% below this average (A). The Forward P/E based on Non-GAAP adjusted net income is reported to be approximately 18–20x (E; the precise consensus figure is not available).
Supply and Demand Trends
For the settlement period 2026-06-13 to 2026-06-30, short interest increased +14.05% (+8,641,112 shares) from the prior period, though both the percentage of shares outstanding (1.50%) and days to cover (2.2 days) remain at low absolute levels (A). Based on Q1 2026 (2026-01-01 to 2026-03-31) 13F filings, 2,299 institutions increased their positions and 1,809 decreased, with institutions increasing positions in the majority (A).
| Category | Institution | Change in Shares | Change Rate |
|---|---|---|---|
| Increased | Capital Research Global Investors | +29,663,579 | +34.3% |
| Increased | SG Americas Securities LLC | +10,416,346 | +95.3% |
| Decreased | Capital International Investors | -57,817,288 | -40.8% |
Basis: Q1 2026 (2026-01-01 to 2026-03-31) 13F filings (A) · Source: SEC EDGAR 13F · Capital Research (increased) and Capital International (decreased) may reflect adjustments between affiliated funds within the same Capital Group family
Based on Form 4 filings from April to July 2026 (4/8–7/10), there were 12 insider sales totaling approximately $302 million and 1 acquisition ($373,570) — co-founder Henry Samueli's sale of 654,241 shares on June 24 (approximately $250 million) was the largest single transaction (A).
Source: FINRA/NASDAQ disclosures (MarketBeat aggregation), SEC EDGAR 13F/Form 4, Barchart.com · Not available: Q2 2026 13F (filing deadline 2026-08-14 not yet reached), detailed positions by option expiration
Macro Factors
| Factor | Current Value (as of) | Transmission Summary | Direction |
|---|---|---|---|
| US Fed Funds Rate | Effective 3.63% (2026-07-15), target range 3.50–3.75% | Sustained rates pressure valuation multiples for high-multiple growth stocks | Negative (-), Medium |
| US-China Semiconductor Export Controls | Shift to case-by-case review in Jan 2026, China's VMware phase-out directive | Exposure via ~17–18% Greater China revenue share | Negative (-), Medium |
| AI Infrastructure Investment Cycle | Combined capex estimate for 4 major tech companies ~$725.0 billion (FY2026E, +77% YoY) | Expanded hyperscaler orders directly drive XPU and networking demand | Positive (+), High |
| Semiconductor Industry (AI vs. Non-AI) | Q2 FY2026 non-AI semiconductor revenue $4.2 billion (+6% YoY) | Structural expansion in AI data centers, moderate recovery in consumer segment | Positive (+), Medium |
| US Dollar Strength (DXY) | 100.78 (2026-07-17) | Most overseas revenue is USD-denominated, limiting direct FX impact | Negative (-), Low |
| Enterprise IT Spending / VMware Transition | Q2 FY2026 infrastructure software revenue $7.2 billion (+9% YoY) | Subscription transition expands recurring revenue, alongside potential mid-to-long-term customer attrition | Positive (+), Medium |
As of 2026-07-16 · Source: Fed H.15, Trading Economics, PR Newswire, IDC, Deloitte (mix of A/E — see original sources for detail)
Risk Factors
- China/Geopolitics: Shift to case-by-case review for US AI chip exports to China in Jan 2026, Chinese government directive for state-owned enterprises to phase out VMware (deadline end of H1 2026) — exposure via ~17–18% Greater China revenue share (A)
- Customer Concentration: AI semiconductor revenue is concentrated among the top 3–6 hyperscalers, with Google estimated as the single largest customer (E)
- VMware Integration: Reports of substantial cost increases upon contract renewal following the elimination of perpetual licenses and transition to subscriptions; a lawsuit of approximately $120 million related to the Tesco contract is ongoing (A)
- Intensifying Competition: Expanding ASIC design capabilities at Marvell and Qualcomm, and attempts by major customers to bring chip design in-house (E)
- Rates and Multiples: Potential for multiple compression at the current high-valuation TTM P/E of 62.3x if interest rates normalize (E)
- Financial Structure: Long-term debt related to the VMware acquisition of approximately $62.0 billion (as of end of FY2025, A), with intangible asset amortization of approximately $8.0 billion continuing annually
Not available: The direct trigger for the -5.03% price decline on 2026-07-16, the latest balance of VMware acquisition-related debt, and whether an official EU regulatory inquiry is underway
Governance and Shareholder Returns
The board of directors consists of 8 members (7 independent, 1 non-independent), and CEO Hock E. Tan has served since 2006 (A). Amie Thuener (formerly of Alphabet) joined as the new CFO on 2026-06-12 (A).
Source: SEC EDGAR 10-K (2025-12-18), DEF 14A (2026), 8-K (2025-12-11)
Theme Relevance
Fact Highlights
Generated by FomoLog Agent · Data sources: Korea Exchange · NASDAQ · DART · SEC EDGAR