Broadcom earnings report crucial for stock rally prospects

Broadcom posted record revenue last quarter, grew its AI chip business by 143% year over year, and generated $10.3 billion in free cash flow. The stock still dropped roughly 12-13% after earnings. Now, as Broadcom approaches its fiscal Q3 2026 earnings report scheduled for after market close on September 2, the company faces pressure to prove the AI story still has legs. What happened last quarter, and why it wasn’t enough Broadcom’s fiscal Q2 2026 results, covering the period that ended May 3, were objectively impressive. Total revenue hit $22.2 billion, a 48% increase compared to the same period a year earlier. AI semiconductor revenue alone reached $10.8 billion, more than doubling from the prior year. Operating margins came in around 67%. Free cash flow of $10.3 billion gave the company enormous financial flexibility. The company’s forward guidance, while still aggressive by any normal standard, apparently didn’t clear the bar that the market had already priced in. Broadcom guided for Q3 2026 revenue of $29.4 billion, including $16 billion from AI semiconductors, implying more than 200% year-over-year growth. The $100 billion question For the full fiscal year 2026, the company ...