Observed Signal · Jun 5, 2026 · Earnings Report · Source: CNBC Investing · Impact: 4/5 · Sentiment: Neutral
Broadcom Guidance Sparks Stock Drop; Buying Opportunity
Broadcom reported a profitable Q2 with revenue of $22.19 billion, slightly above consensus, but its forward guidance for AI chip revenue fell short of market "whisper" expectations and triggered roughly a 15% intraday stock drop. The company projected Q3 AI chip revenue of $16 billion versus unofficial expectations around $17 billion; weakness in legacy non-AI businesses (enterprise storage, broadband routing) also weighed on sentiment. CNBC Pro contributor Jeff Kilburg describes the pullback as a buying opportunity and outlines an options spread (short $400 put, long $370 put, long $430 call) established around an AVGO price near $405, costing about $5 and offering upside above $435. Kilburg discloses his Mango Growth ETF (GARY) recently purchased Broadcom stock. The article was published June 5, 2026.
Broadcom is a major semiconductor and enterprise-infrastructure company; its quarterly guidance and AI revenue forecast materially influence tech market sentiment, AI hardware expectations, and investor positioning.
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Key Takeaways & Evidence Grounding
- Broadcom reported Q2 revenue of $22.19 billion, beating the consensus estimate of $22.13 billion.
- Broadcom projected Q3 AI chip revenue of $16 billion; informal "whisper" estimates were around $17 billion.
- The stock fell about 15% on the day following the guidance miss relative to market expectations.
- Author Jeff Kilburg posted an options spread trade (sold AVGO $400 7/17/2026 put for $22.75; bought AVGO $370 put for $9.75; bought AVGO $430 call for $17.75), costing roughly $5 and offering unlimited profit above $435; AVGO was trading near $405 when the trade was established.
- Kilburg discloses that his Mango Growth ETF (ticker: GARY) purchased Broadcom (AVGO) and that he is long the spread.
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Broadcom Poised for Large AI-Driven Gain
CNBC Pro contributor Jeff Kilburg argues Broadcom (AVGO) is significantly undervalued relative to Wall Street targets amid accelerating AI infrastructure demand. Recent quarter AI semiconductor revenue reached $10.8 billion (+143% YoY); management guided $16 billion for the current quarter and reaffirmed $56 billion for the fiscal year, with line-of-sight to over $100 billion in fiscal 2027. About 40% of recent AI revenue came from networking (Tomahawk switches) and the remainder from custom XPUs/TPUs for hyperscalers including Google, OpenAI and Anthropic. Kilburg proposes a defined-risk options spread around the Sept. 18, 2026 expiration to express a bullish view ahead of Broadcom’s Sept. 2 earnings report.
Broadcom Outlook Triggers Chip Sell-Off
Broadcom delivered strong quarterly results on June 4, 2026 but declined to raise revenue guidance, reiterating fiscal‑year 2027 AI revenue guidance of $100 billion. The stock fell about 15% in premarket trading and the weakness spread to other semiconductor names including Micron, AMD, SanDisk and Intel. Some market participants saw the move as profit‑taking in richly valued names rather than a fundamentals-driven industry reset: hyperscalers (Alphabet, Amazon, Meta, Microsoft) traded higher and Nvidia was flat. BTIG noted the S&P 500 information technology index had an RSI of 82 and was 28% above its 200‑day moving average. Analysts highlighted modest customer diversification risk for Broadcom at Alphabet — Macquarie projects Broadcom’s share of Google’s TPU supply to fall from ~95% in 2026 to ~80% in 2027 and ~65% in 2028.
Broadcom Q2 2026 Revenue Miss Sends Stock Lower
Broadcom reported fiscal second-quarter results on June 3, 2026, that beat on adjusted EPS but missed on revenue versus LSEG consensus. Adjusted EPS was $2.44 (vs. $2.40 expected) while revenue was $22.19 billion (vs. $22.27 billion expected). Net income rose to $9.31 billion, and AI-related revenue more than doubled year-over-year to $10.8 billion. The company said it expects next-quarter revenue of about $29.4 billion, above Wall Street’s $28.53 billion forecast. Broadcom’s sales have been driven by demand for custom AI chips and related networking components, and the firm also reported infrastructure software revenue following its VMware acquisition. The stock slid in extended trading after the revenue miss despite strong AI demand and upbeat guidance.
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