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Numbers in earnings reports come and go. Every quarter brings a new beat, a new record, a new reason to pay attention. But occasionally, a single line in a guidance statement stops you cold.
For Broadcom (AVGO), that line came from CEO Hock Tan on March 4, 2026, buried inside the company's first-quarter fiscal 2026 results. AI semiconductor revenue came in at $8.4 billion for the quarter, up 106% YOY. Strong, but expected. Then came the forward guidance.
"We expect AI semiconductor revenue to be $10.7 billion in Q2," said Hock Tan, President and CEO of Broadcom Inc.
That is not incremental growth. That is massive acceleration. From $8.4 billion to $10.7 billion in a single quarter implies year-over-year growth of approximately 140%. At a company already doing nearly $20 billion in quarterly revenue, that kind of acceleration in a single segment is extraordinary.
AVGO is up 24.48% year-to-date and up 115.92% over the past year, according to Yahoo Finance. The market is watching. And after that guidance line, the question is no longer whether Broadcom is an AI winner. It is how big this gets.
Broadcom's first-quarter fiscal 2026 results, reported March 4, were records across the board, according to the company's earnings release.
Total revenue of $19.31 billion, up 29% year over year
Adjusted EBITDA of $13.13 billion, representing 68% of revenue
Free cash flow of $8.01 billion, equal to 41% of revenue Source: Broadcom Inc. First Quarter Fiscal Year 2026 Financial Results
Broadcom also returned $10.9 billion to shareholders in the quarter alone, through $3.1 billion in dividends and $7.8 billion in stock repurchases. A new $10 billion share repurchase program was simultaneously authorized, according to the release.
The AI revenue line was the standout. At $8.4 billion in a single quarter, AI chips now represent a dominant share of Broadcom's semiconductor business. The 106% year-over-year growth rate already exceeded Broadcom's own internal forecast, Tan noted.
Related: Broadcom makes unexpected strategic move with Google
The $10.7 billion Q2 AI revenue target, if achieved, would bring the company within striking distance of its stated goal of $100 billion in total AI-related sales by 2027.
"Our AI revenue growth is accelerating," Tan said plainly.
The headline Q2 guidance number is $22 billion in total revenue, up 47% year-over-year, according to Broadcom's outlook. Adjusted EBITDA is expected to remain at 68% of revenue.
That 47% revenue growth rate, for a company of Broadcom's size, doesn’t look normal. It reflects what happens when custom AI accelerator demand from six major hyperscaler partners converges with networking infrastructure buildout and an enterprise software business generating stable, high-margin cash flows.
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The VMware business, acquired in late 2023, reported $6.8 billion in revenue at 78% margins with $9.2 billion in bookings, according to Seeking Alpha. That engine is quietly funding the AI expansion while attracting far less attention than the chip numbers.
Broadcom's second-quarter fiscal 2026 results are due June 3. The market will be watching one number above everything else, whether the $10.7 billion AI revenue target is met or exceeded.
The semiconductor story at Broadcom is well understood. The software story is catching up. On May 5, Broadcom announced VMware Cloud Foundation 9.1, an AI and Kubernetes native private cloud platform designed for production AI workloads.
The platform supports hardware from AMD, Intel, and Nvidia, giving enterprises flexibility to deploy inference and agentic AI applications without being locked into a single vendor. The cost efficiency numbers cited in the announcement are notable.
Up to 40% reduction in server costs through intelligent memory tiering
Up to 39% lower storage total cost of ownership through enhanced compression for AI data pipelines
Up to 46% reduction in Kubernetes operational costs for AI workloads at scale. Source: Broadcom
The enterprise market is responding. According to Broadcom's Private Cloud Outlook 2026 report, 56% of organizations are running or planning to run production AI inference in a private cloud.
Public cloud use for production inference fell to 41%, down 15% year over year. Cost concerns are driving the shift, with 62% of IT leaders reporting being extremely concerned about generative AI infrastructure costs.
That shift plays directly into Broadcom's hands. Both through VMware on the software side and through custom AI accelerators on the silicon side. In fact, the two businesses are beginning to reinforce each other in ways the market is only starting to price in.
Related: Goldman Sachs resets Broadcom stock forecast
This story was originally published by TheStreet on May 6, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.