Fabless chip and software maker Broadcom (NASDAQ: AVGO) reported revenue ahead of Wall Street’s expectations in Q1 CY2026, with sales up 47.9% year on year to $22.19 billion. On top of that, next quarter’s revenue guidance ($29.4 billion at the midpoint) was surprisingly good and 4.1% above what analysts were expecting. Its non-GAAP profit of $2.44 per share was 1.8% above analysts’ consensus estimates.
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Broadcom (AVGO) Q1 CY2026 Highlights:
- Revenue: $22.19 billion vs analyst estimates of $22.06 billion (47.9% year-on-year growth, 0.6% beat)
- Adjusted EPS: $2.44 vs analyst estimates of $2.40 (1.8% beat)
- Adjusted EBITDA: $15.24 billion vs analyst estimates of $15.15 billion (68.7% margin, 0.6% beat)
- Revenue Guidance for Q2 CY2026 is $29.4 billion at the midpoint, above analyst estimates of $28.24 billion
- Operating Margin: 48.6%, up from 38.8% in the same quarter last year
- Free Cash Flow Margin: 46.3%, up from 42.7% in the same quarter last year
- Inventory Days Outstanding: 58, in line with the previous quarter
- Market Capitalization: $2.28 trillion
"Broadcom achieved record revenue, operating profit and free cash flow in Q2 driven by accelerating growth in AI semiconductor revenue and strong operating leverage. Q2 semiconductor revenue from AI of $10.8 billion grew 143% year-over-year, above our forecast, driven by increasing demand for custom AI accelerators and AI networking," said Hock Tan, President and CEO of
Company Overview
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Broadcom’s 24.2% annualized revenue growth over the last five years was incredible. Its growth surpassed the average semiconductor company and shows its offerings resonate with customers, a great starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. Broadcom’s annualized revenue growth of 33.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, Broadcom reported magnificent year-on-year revenue growth of 47.9%, and its $22.19 billion of revenue beat Wall Street’s estimates by 0.6%. Company management is currently guiding for a 84.3% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 80.8% over the next 12 months, an improvement versus the last two years. This projection is eye-popping for a company of its scale and indicates its newer products and services will catalyze better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Broadcom’s DIO came in at 58, which is 5 days below its five-year average. Flat versus last quarter, there’s no indication of an excessive inventory buildup.
Key Takeaways from Broadcom’s Q1 Results
It was great to see Broadcom’s revenue guidance for next quarter top analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 5.7% to $452.93 immediately after reporting.
Is Broadcom an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
