Broadcom Q2 FY2026 Earnings: $22.19 Billion Record as $10.8 Billion AI Revenue Passes Half the Chip Business

On June 3, 2026, Broadcom reported second-quarter fiscal 2026 revenue of $22.19 billion, a record for the company, as AI revenue hit $10.8 billion (+143% year-over-year) and crossed half of semiconductor revenue for the first time on custom AI accelerators. With Q3 AI guided to $16 billion, the question is no longer whether Broadcom is an AI chip company, but how fast it can ship.

The Headline Numbers​

Broadcom Inc.'s fiscal year ends in October; Q2 FY2026 covers February 2 – May 3, 2026. Every figure below is from the Form 10-Q cited in Sources; the AI revenue figures are from the earnings release.

Revenue growth of 47.9% is the headline, but the ledger shows what that growth cost. See the income-statement block below: every dollar is forced to reconcile, so a beat that comes from a one-off item looks different from one that comes from operating leverage. This quarter is the latter for Broadcom: operating income grew 85% on 48% more revenue, and net income grew 87.5% even though the tax provision rose from $120M to $820M.

Revenue Deep Dive​

Segment detail comes from the same filing that feeds the ledger. The thesis for this quarter is in the mix, not the total.

Software carries the base; semiconductors carry the growth. Semiconductor Solutions revenue rose 79% from $8408M a year earlier, while Infrastructure Software rose 9% from $6596M, so the semiconductor share of revenue moved from 56% to 68% in one year. AI at $10.8B is now 49% of total revenue and well over half of semiconductor sales.

The Margin Story​

Margins are the check on revenue quality. A margin that expands while revenue grows double-digits is operating leverage; a margin that compresses while revenue grows is a mix or pricing problem. This quarter, Broadcom's net margin reached 42.0%, up from 36.2% for FY2025, while gross margin held at 69% of revenue against 68% a year earlier. The $10.8B AI ramp arrived on a cost base that barely moved: amortization of acquired intangibles was $1967M against $1989M a year earlier, and research and development grew 11% while revenue grew 48%.

The One Big Question: Custom AI accelerators pass half the chip business​

The defining question this quarter is whether the growth driver that produced the beat can be repeated. For Broadcom, that driver is custom AI accelerators passing half the chip business — $10.8B AI revenue (+143%) inside a record $22.2B quarter, with Q3 AI guided to $16B. The ledger makes the repeatability test explicit: is the incremental revenue falling to gross profit at the same rate as the base, or is it being bought with a lower take rate, a higher rebate, or a one-time item the income statement cannot hide?

The segment results give a first answer:

A segment whose operating income grows faster than its revenue is being paid for a real advantage. A segment growing revenue at a shrinking margin is renting growth. Both of Broadcom's segments were on the right side of that line this quarter.

Tracking a $22.19B company in plain text​

Double-entry forces every dollar to reconcile, which is why the Beancount ledger is the audit. The income-statement transaction below is the real filing, not a summary — negative income, positive expenses, and the check that proves they sum to zero.

; Revenue: 22,187 | CostOfRevenue (cash): 5,301 | Amortization: 1,967 (COGS 1,461 + opex 506)
; R&D: 2,995 | SG&A: 1,055 | OtherNet: 739 | Tax: 820 | Net income: 9,310
; Check: -22187 + 5301 + 1967 + 2995 + 1055 + 739 + 820 + 9310 = 0 ✓
 
2026-05-03 * "Broadcom Inc." "FY2026Q2 Income Statement"
  Income:Revenue                                -22187 MUSD
  Expenses:CostOfRevenue                          5301 MUSD
  Expenses:ResearchAndDevelopment                 2995 MUSD
  Expenses:SellingGeneralAdministrative           1055 MUSD
  Expenses:AmortizationOfAcquiredIntangibles      1967 MUSD
  Expenses:OtherNet                                739 MUSD
  Expenses:IncomeTax                               820 MUSD
  Equity:Adjustments                              9310 MUSD  ; net income offset

That block is not an illustration; it is the period that was validated with bean-check and pushed to open_ledger/broadcom. Expenses:OtherNet is restructuring charges of $81M plus interest expense of $776M, less other income of $118M. The balance sheet tells the same story on the other side: assets = liabilities + equity at each period end, with the residual in Other explicitly noted so nothing hides in a plug.

The one balance-sheet number that matters most this quarter is goodwill plus intangible assets as a share of assets. They were $126134M of $179158M in total assets on May 3, 2026, or 70%. For an acquisitive platform that closed VMware, that ratio shows how much of the balance sheet is still the acquisition, even as the AI ramp is organic.

The Multi-Year Arc​

The compounding story is not the Q2 number alone but the slope from FY2021 to FY2025: Broadcom from $27.5B to $63.9B (+133% in four years) while net margin step-changed from 25% to 36% on the VMware and AI mix, and reached 42% in the latest quarter. Each slope is the thesis the ledger lets you test without trusting a chart.

The Verdict: Bull vs. Bear​

Bull Case

• Custom AI accelerator ramp sustains — Q3 guide to $16B AI proves the $10.8B was not pull-forward.
• Software (VMware) retention holds, so the mix shift toward high-margin recurring revenue continues.
• Gross margin expansion from AI scale drops through to net margin despite amortization.
• The ledger's history shows Broadcom has managed prior platform integrations without dilution.

Bear Case

• AI revenue concentration in two hyperscalers makes the ramp lumpy — one push-out breaks the quarter.
• VMware churn accelerates, compressing the software margin just expanded.
• Amortization and integration costs grow faster than AI revenue next quarter.
• Valuation already prices two years of AI growth, leaving no room for a guidance miss.

Our Take: The Q2 report supports the bull thesis on AI scale but does not yet settle the concentration question. The ledger now exists so that question can be answered with numbers, not narratives — next quarter's filing will either confirm the hyperscaler durability or break it, and the transaction will show which.