A fabless chip and software firm, Broadcom designs custom AI accelerators (XPUs), Ethernet switching silicon, and radio-frequency modules, plus VMware Cloud Foundation and other enterprise software for data centers, wireless devices, and large companies. It descends from a 1961 Hewlett-Packard semiconductor division that became Avago Technologies, which merged in 2016 with the original Broadcom Corporation, founded in 1991 by UCLA professor Henry Samueli and his PhD student Henry Nicholas. Its name blends "broadband" and "communications," and roughly half its workforce is in research and development.
Semiconductor solutions revenue rose 79% to drive Q2 FY2026 revenue up 48% to $22.2B
Custom AI accelerators and AI networking carried the quarter. rose 47.9% to $22.2B and rose 85.1% to $10.8B as semiconductor solutions revenue climbed 79%, with at 69.5% and at $1.91. Broadcom is now generating record cash while carrying $66.7B of debt and concentrated customer and supply risk.
Key takeaways
Semiconductor solutions rose 79% on strong demand for custom AI accelerators and AI networking products, driving total net revenue up 47.9% to $22.2B.
rose 85.1% to $10.8B, with semiconductor solutions operating income up 93% and infrastructure software up 13%, while improved to 69.5% from 68.0% a year earlier as growth offset a higher lower-margin semiconductor mix.
Infrastructure software grew 9% to $7.2B, primarily from demand, a slower contribution than the semiconductor this quarter.
Section summaries
Management's Discussion and Analysis
Revenue surged 48% YoY to $22.2B driven by custom AI accelerators and AI networking; operating income nearly doubled to $10.8B.
⌄
Total net rose 48% to $22.2B for the quarter, with semiconductor solutions up 79% on strong demand for custom AI accelerators and AI networking products.
expense increased to $2.1B due to the full impact of two-year equity awards granted in fiscal 2025, and was $10.5B for the quarter, up 60.1% .
The company repurchased $8.5B in stock and paid $6.2B in dividends over the two fiscal quarters to date, with cash and equivalents ending at $19.6B, up 107.2% .
What changed
Infrastructure software growth resumed at 9% this quarter after the 1% Q1 FY2026 rise flagged to watch, as demand held.
Semiconductor solutions trajectory continued upward with a 79% Q2 rise versus the 52% Q1 increase flagged for cyclical and broadband weakness, with AI accelerator demand outweighing those headwinds.
Aggregate was $66.7B as of May 3, 2026, down from $67.97B at Q1 FY2026 end, against $10.5B quarterly and ongoing repurchases.
All were cleared by Q3 FY2025 per the FY2025 10-K; this 10-Q confirms a hypothetical 50 move changes borrowing fair value by $1.9B but does not affect on fixed-rate debt.
Top five end customers accounted for ~45% of net this quarter versus ~50% in Q1 FY2026, while distributor sales were 56% versus 55% previously, keeping concentration risk elevated.
What to watch
Infrastructure software next quarter to see if the 9% Q2 rise holds or normalizes as the VMware perpetual-to-subscription transition completes.
Semiconductor solutions as custom AI accelerator demand meets cyclical downturn and broadband weakness into Q3 FY2026.
and cash tax cost in FY2026 as the global minimum tax takes effect against the FY2025 rate.
Aggregate path as $66.7B borrowings meet $10.5B quarterly and ongoing repurchases and dividends.
Infrastructure software grew 9% to $7.2B, primarily driven by strong demand for ().
improved to 69% from 68% , benefiting from growth, partially offset by a higher mix of lower-margin semiconductor solutions revenue.
nearly doubled to $10.8B, with semiconductor solutions operating income up 93% and infrastructure software up 13%.
expense increased to $2.1B for the quarter due to the full impact of granted in fiscal 2025.
was $18.8B for the two fiscal quarters; the company repurchased $8.5B in stock and paid $6.2B in dividends.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risks from the information presented in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in the 2025 Annual Report on Form 10-K, except as disclosed below. Interest Rate Risk Changes in interest rates a…
⌄
There have been no material changes in market risks from the information presented in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk,” in the 2025 Annual Report on Form 10-K, except as disclosed below.
Interest Rate Risk
Changes in interest rates affect the fair value of our outstanding borrowings. As of May 3, 2026 and November 2, 2025, we had $66.7 billion and $67.1 billion in principal amount of borrowings outstanding, and the estimated aggregate fair value of these borrowings was $62.5 billion and $64.6 billion, respectively. As of each of May 3, 2026 and November 2, 2025, a hypothetical 50 basis point change in market interest rates would change the fair value of our borrowings by approximately $1.9 billion. However, this hypothetical change in interest rates would not impact the interest expense on our borrowings outstanding. To hedge variability of cash flows due to changes in the benchmark interest rate of anticipated future debt issuances, we have entered, and in the future may enter, into treasury rate lock contracts.
The information set forth under Note 10. “Commitments and Contingencies” included in Part I, Item 1 of this Form 10-Q, is incorporated herein by reference. For additional discussion of certain risks associated with legal proceedings, see “Risk Factors” immediately below.
⌄
The information set forth under Note 10. “Commitments and Contingencies” included in Part I, Item 1 of this Form 10-Q, is incorporated herein by reference. For additional discussion of certain risks associated with legal proceedings, see “Risk Factors” immediately below.
Customer concentration, AI-driven business model shifts, and supply-chain dependency on TSMC and limited materials suppliers are the most acute risks.
⌄
Sales to distributors were 56% of net and the top five end customers accounted for ~45%, heightening exposure to demand cuts or customer-specific financial stress.
Large AI customers are increasingly seeking leases, deferred payment models, or full rack/system purchases for custom , which may compress and increase credit or default risk.
Approximately 95% of outsourced wafers come from TSMC, and over three-quarters of manufacturing materials are purchased from five suppliers, some single-sourced, creating concentrated supply risk.
Trade tensions, tariffs, and evolving export controls—especially involving China—could limit market access, disrupt the supply chain, or force customer and supplier changes.
The shift toward AI infrastructure is compressing semiconductor gross margins relative to software, and failure to execute new business models around AI racks or leasing could impair profitability.
Substantial indebtedness of $66.7 billion and potential tax liabilities from the /Dell spin-off create financial flexibility and contingent liability risks.