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Broadcom Q1 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
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Key Takeaways
Broadcom reported Q1 FY26 non-GAAP EPS of $2.05, beating estimates as revenues rose 29.5% YoY to $19.31B.
AVGO semiconductor revenues jumped 52% YoY to $12.52B, driven by a 106% surge in AI-related revenue.
Broadcom expects fiscal Q2 revenues of $22B, with AI revenues projected to soar 140% YoY to $10.7B.
Broadcom (AVGO - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of $2.05 per share, beating the Zacks Consensus Estimate by 0.99% and jumping 28.1% year over year.
Revenues rallied 29.5% year over year to $19.31 billion and beat the Zacks Consensus Estimate by 0.13%.
AVGO shares jumped more than 4% at the time of writing this article. The stock has appreciated 83.2% in the trailing 12 months compared with the Zacks Computer & Technology sector’s return of 31.5%.
Semiconductor solutions revenues (64.8% of net revenues) totaled $12.52 billion, up 52% year over year. The uptick was driven by the strong AI revenues, which surged 106% year over year. AI networking revenues grew 60% year over year and represented one-third of AI revenues. Non-AI revenues were flat year over year to $4.1 billion. Enterprise networking, broadband and server storage revenues were up year over year, offset by a seasonal decline in wireless.
Infrastructure software revenues (35.2% of net revenues) climbed 1% year over year to $6.8 billion. VMware revenues grew 13% year over year. Bookings continue to be strong, and total contract value booked in the fiscal first quarter exceeded $9.2 billion.
The non-GAAP gross margin was 77%, down 210 basis points (bps) year over year.
Research and development expenses, as a percentage of net revenues, decreased 170 bps year over year to 7.9%. SG&A expenses, as a percentage of net revenues, decreased 90 bps to 2.7%.
Adjusted EBITDA rose 30% year over year to $13.13 billion. The adjusted EBITDA margin was 68%, up 40 bps year over year. The non-GAAP operating margin expanded 50 bps year over year to 66.4%.
AVGO’s Balance Sheet & Cash Flow
As of Feb. 1, 2026, cash and cash equivalents were $14.17 billion compared with $16.18 billion as of Nov. 2, 2025.
Total debt (including the current portion of $3.15 billion) was $66.06 billion as of Feb. 1, 2026, compared with $65.14 billion as of Nov. 2, 2025.
Broadcom generated $8.26 billion in cash flow from operations compared with $7.7 billion in the previous quarter. The free cash flow was $8.01 billion compared with $7.47 billion in the prior quarter.
On Dec. 31, 2025, AVGO paid a cash dividend of 65 cents per share, totaling $3.09 billion. During the reported quarter, Broadcom repurchased $7.8 billion or approximately 23 million shares of common stock. The company’s board authorized an additional $10 billion related to share repurchases through the end of calendar 2026.
AVGO Offers Solid Q2 Guidance
For the second quarter of fiscal 2026, Broadcom expects revenues of $22 billion, indicating 47% year-over-year growth. Semiconductor revenues are expected to be $14.8 billion, indicating 76% year-over-year growth. AI revenues are expected to surge 140% year over year to $10.7 billion, driven by strong demand for custom AI accelerators. AI networking is expected to accelerate in the second quarter of fiscal 2026 and grow to 40% of total AI revenues. Non-AI revenues are expected to increase 4% year over year to $4.1 billion.
Infrastructure Software revenues are expected to be roughly $7.2 billion, up 9% year over year.
Gross margin is expected to be flat sequentially at 77%. The adjusted EBITDA margin is expected to be 68% for the second quarter of fiscal 2026.
Zacks Rank & Stocks to Consider
Currently, AVGO has a Zacks Rank #3 (Hold).
Advanced Energy Industries (AEIS - Free Report) , IPG Photonics (IPGP - Free Report) and Teradyne (TER - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
Long-term earnings growth rate for Advanced Energy Industries, IPG Photonics and Teradyne is currently pegged at 19.36%, 22.34% and 27.28%, respectively.
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Broadcom Q1 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
Key Takeaways
Broadcom (AVGO - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of $2.05 per share, beating the Zacks Consensus Estimate by 0.99% and jumping 28.1% year over year.
Revenues rallied 29.5% year over year to $19.31 billion and beat the Zacks Consensus Estimate by 0.13%.
AVGO shares jumped more than 4% at the time of writing this article. The stock has appreciated 83.2% in the trailing 12 months compared with the Zacks Computer & Technology sector’s return of 31.5%.
Broadcom Inc. Price, Consensus and EPS Surprise
Broadcom Inc. price-consensus-eps-surprise-chart | Broadcom Inc. Quote
AVGO’s Q1 Details
Semiconductor solutions revenues (64.8% of net revenues) totaled $12.52 billion, up 52% year over year. The uptick was driven by the strong AI revenues, which surged 106% year over year. AI networking revenues grew 60% year over year and represented one-third of AI revenues. Non-AI revenues were flat year over year to $4.1 billion. Enterprise networking, broadband and server storage revenues were up year over year, offset by a seasonal decline in wireless.
Infrastructure software revenues (35.2% of net revenues) climbed 1% year over year to $6.8 billion. VMware revenues grew 13% year over year. Bookings continue to be strong, and total contract value booked in the fiscal first quarter exceeded $9.2 billion.
The non-GAAP gross margin was 77%, down 210 basis points (bps) year over year.
Research and development expenses, as a percentage of net revenues, decreased 170 bps year over year to 7.9%. SG&A expenses, as a percentage of net revenues, decreased 90 bps to 2.7%.
Adjusted EBITDA rose 30% year over year to $13.13 billion. The adjusted EBITDA margin was 68%, up 40 bps year over year. The non-GAAP operating margin expanded 50 bps year over year to 66.4%.
AVGO’s Balance Sheet & Cash Flow
As of Feb. 1, 2026, cash and cash equivalents were $14.17 billion compared with $16.18 billion as of Nov. 2, 2025.
Total debt (including the current portion of $3.15 billion) was $66.06 billion as of Feb. 1, 2026, compared with $65.14 billion as of Nov. 2, 2025.
Broadcom generated $8.26 billion in cash flow from operations compared with $7.7 billion in the previous quarter. The free cash flow was $8.01 billion compared with $7.47 billion in the prior quarter.
On Dec. 31, 2025, AVGO paid a cash dividend of 65 cents per share, totaling $3.09 billion. During the reported quarter, Broadcom repurchased $7.8 billion or approximately 23 million shares of common stock. The company’s board authorized an additional $10 billion related to share repurchases through the end of calendar 2026.
AVGO Offers Solid Q2 Guidance
For the second quarter of fiscal 2026, Broadcom expects revenues of $22 billion, indicating 47% year-over-year growth. Semiconductor revenues are expected to be $14.8 billion, indicating 76% year-over-year growth. AI revenues are expected to surge 140% year over year to $10.7 billion, driven by strong demand for custom AI accelerators. AI networking is expected to accelerate in the second quarter of fiscal 2026 and grow to 40% of total AI revenues. Non-AI revenues are expected to increase 4% year over year to $4.1 billion.
Infrastructure Software revenues are expected to be roughly $7.2 billion, up 9% year over year.
Gross margin is expected to be flat sequentially at 77%. The adjusted EBITDA margin is expected to be 68% for the second quarter of fiscal 2026.
Zacks Rank & Stocks to Consider
Currently, AVGO has a Zacks Rank #3 (Hold).
Advanced Energy Industries (AEIS - Free Report) , IPG Photonics (IPGP - Free Report) and Teradyne (TER - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
Advanced Energy Industries, IPG Photonics and Teradyne each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Advanced Energy Industries, IPG Photonics and Teradyne is currently pegged at 19.36%, 22.34% and 27.28%, respectively.