Broadcom misses revenue targets but unveils $35 billion AI infrastructure financing deal

Broadcom revenue miss stuns Wall Street, and its stock sinks after-hours

Broadcom revenue miss stuns Wall Street, and its stock sinks after-hours Shares of the chipmaker Broadcom Inc. came crashing down to Earth in late trading today after it reported weaker than expected second quarter revenue in its latest financial report. The stock fell initially, and then slid even further after Chief Executive Hock Tan declined to raise the company's full-year guidance for artificial intelligence chip sales beyond the current $100 billion forecast range. Broadcom, which has regularly blown away Wall Street's forecasts in recent quarters, struggled to impress today. The company reported earnings before certain costs such as stock compensation of $2.44 per share, edging past the Street's target of $2.40 per share. However, revenue came to just $22.19 billion, up 48% from a year earlier but below the $22.27 billion analyst consensus estimate. It was the first time the company came up short of the Street's targets since December 2024, following a series of impressive quarters driven by demand for AI processors such as Google LLC's tensor processing units. The company did at least increase its bottom line by an impressive margin, with net income coming to $9.31 billion at the end of the quarter, up from $4.96 billion in the year-ago period. For the current quarter, Broadcom said it's anticipating sales of around $29.4 billion at the midpoint of its guidance range, which is above the Street's consensus estimate of $28.53 billion. However, investors couldn't look past the revenue miss, and Broadcom's stock fell more than 12% in extended trading. It's still up about 38% in the year to date, surpassing the Nasdaq index's 16% gain so far this year. Since the end of 2022, the company's shares have increased ninefold amid rampant demand for AI chips. Broadcom has become one of the biggest beneficiaries of the AI boom because it helps some of the biggest cloud infrastructure providers and technology firms to design and develop custom AI processors. It owns a lot of the intellectual property, essential technologies and expertise required to design sophisticated semiconductors, and has become a key partner to just about anyone looking to avoid relying too heavily on Nvidia Corp.'s graphics processing units. In the last year or so it has gained even more attention as AI companies like Anthropic PBC and OpenAI push to develop their own custom AI processors. In December, the company reported that Anthropic had placed a $10 billion order for custom silicon. On a conference call with analysts, Tan said that Broadcom now has six customers for custom chips, including Anthropic, OpenAI, Google and Meta Platforms Inc., and that those are the main driving force behind its AI revenue growth. Many investors had hoped he would raise the company's AI chip revenue forecast, as he has in previous quarters, but he let them down today. "We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100 billion," Tan said. Tan added that the company also plans to sell "chips only" to some customers, rather than the fully-integrated AI systems it has traditionally sold. That means it will only sell the chips themselves, and not the server systems and networking infrastructure that usually goes with them. Nonetheless, Broadcom's AI revenue growth was impressive, with sales more than doubling from a year ago to $10.8 billion. Tan added that AI revenue is expected to grow to around $16 billion in the current quarter. "The bookings that are coming are not for immediate delivery," Tan said. "Some they hope to have, but the reality they all accept is they need to align quite a few other things in place before they can deliver." All told, Broadcom's semiconductor solutions business delivered $15.1 billion in sales, including networking infrastructure and its older legacy chips for Wi-Fi and automotive customers. That surpassed the Street's target of $14.72 billion. Broadcom also sells enterprise software through its infrastructure solutions group, which was bolstered by the acquisition of VMWare in 2023. That unit delivered $7.18 billion in revenue, up 9% from a year earlier but shy of the Street's forecast of $7.32 billion.

Apollo, Blackstone back Anthropic's $35 billion capacity expansion in new Broadcom tie-up

Apollo and Blackstone are investing $35 billion to boost Anthropic's AI computing power. This expansion will utilize Broadcom's custom chips and networking. The initial phase adds one gigawatt of capacity, enough for many homes. This infrastructure will be deployed at Fluidstack-operated sites from mid-2026. The partnership aims to provide over 20 GW for leading AI labs by 2028. Apollo and Blackstone are financing a $35 billion expansion of AI computing capacity for Anthropic using Broadcom's custom chips and networking solutions as part of a tie-up between the asset managers and the chipmaker. The initial commitment will expand the Claude Code creator's AI computing capacity by one gigawatt, the companies said ⁠on ⁠Tuesday. One gigawatt is enough to power about 750,000 homes. The capacity is expected to be deployed at Fluidstack-operated sites beginning mid-2026, with the cloud computing company providing the physical data-center infrastructure that will run Anthropic's AI systems. Overall, the partnership plans to enable more than 20 GW in computing capacity for leading AI labs, including ⁠OpenAI, through 2028. Private-equity firms have emerged as a crucial source of funding for AI companies strained by a shortage of ⁠costly and supply-constrained AI infrastructure needed to meet rising demand. Meta in October struck a $27 billion financing deal with Blue Owl Capital to fund its biggest data-center project. Tuesday's deal also bodes well for Broadcom's push to grow its AI business, which has drawn demand from tech companies looking to reduce their reliance on Nvidia with in-house chips. The partnership aims to scale the deployment of custom AI chips and computing systems while cutting the cost and power needed to train AI models, Broadcom said. Apollo ⁠is leading the initial investment tranche for the platform, alongside Blackstone's Credit & Insurance business. In April, Broadcom signed a long-term agreement with Alphabet's Google to develop and supply future generations of custom AI chips for the company's AI racks through 2031. It also signed a deal to give Anthropic access to about 3.5 GW of AI computing capacity drawing on Google's processors, starting next year.

Broadcom, Apollo Build Massive AI Infrastructure Play - Apollo Global Management (NYSE:APO), Broadcom (NA

Broadcom, Apollo And Blackstone Are Quietly Building An AI Infrastructure Giant During the company's fiscal second-quarter earnings call, CEO Hock Tan outlined a strategy that extends far beyond selling semiconductors. The plan involves combining Broadcom's technology with deep-pocketed financial partners to build massive amounts of AI compute capacity for some of the world's leading AI developers. "Our strategic vision is to bring together Broadcom's leading technology and investor partners with the strongest balance sheets to deliver at scale sufficient compute capacity at the lowest cost and power for the leading AI frontier labs including Anthropic and OpenAI," Tan said. The first step is already underway. "The first tranche of this platform, valued at $35 billion, is in fact currently being launched by Apollo," Tan said. Beyond Semiconductor Sales The announcement highlights how the AI race is increasingly becoming an infrastructure buildout rather than simply a semiconductor story. As AI models grow larger and demand for compute continues to surge, financing the underlying infrastructure is emerging as a challenge of its own. Broadcom sits in a unique position. The company already supplies custom AI accelerators and networking technology to some of the industry's largest AI players, including partnerships involving Google, OpenAI, Anthropic and Meta. Now it appears to be helping facilitate the capital required to scale those deployments. The move could position Broadcom as something more than a chip supplier. Instead of merely selling the hardware powering AI, the company is becoming part of the ecosystem funding and enabling the next wave of AI infrastructure. As investors debate who will emerge as the biggest beneficiaries of the AI boom, Broadcom is making a case that the future may belong not only to chipmakers, but also to those helping finance the infrastructure behind them. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Apollo wraps up $35 billion debt to buy AI chips for Anthropic

The package, one of the biggest private credit transactions in history, highlights the race by top-tier financiers to fund data center construction and the chips they use. Tech companies are tapping every corner of the credit markets to meet AI's unprecedented capital demands, forcing Wall Street to engineer novel debt structures to keep pace. Apollo Global Management Inc. and Blackstone Inc. have finalized a $35 billion financing package for Anthropic PBC to expand its AI infrastructure, marking the latest mega-deal in the artificial intelligence race. The debt deal priced across three tranches, according to people familiar with the matter. The capital will fund Google's custom chips for Anthropic to lease, Bloomberg previously reported. The package, one of the biggest private credit transactions in history, highlights the race by top-tier financiers to fund data center construction and the chips they use. Tech companies are tapping every corner of the credit markets to meet AI's unprecedented capital demands, forcing Wall Street to engineer novel debt structures to keep pace. Under the deal, Broadcom Inc. is backstopping payments on the largest senior portions of the debt. It was advised by Morgan Stanley, which helped arrange the transaction, the people said, asking not to be identified discussing private information. Roughly half of the $35 billion of debt was syndicated to other investors, according to the people. Representatives for Apollo, Blackstone, Anthropic and Morgan Stanley declined to comment. Representatives for Broadcom didn't immediately respond to requests for comment. Chip financing The deal represents a milestone for the emerging chip-financing market -- a sector projected to expand rapidly as a wave of new data centers creates sustained demand for specialized hardware. The transaction is expected to be the first of many for Broadcom, which is helping Google develop the tensor processing units, called TPUs. On Broadcom's earnings call this week, Chief Executive Officer Hock Tan said the company is creating what he called the AI XPV platform with Apollo, Blackstone and other leading investors to deploy more than 20 gigawatts of compute capacity through 2028. Apollo is launching the first tranche of this platform, he said. "Our strategic vision is to bring together Broadcom's leading technology and investor partners with the strongest balance sheets to deliver at scale sufficient compute capacity at the lowest cost and power for the leading AI frontier labs, including Anthropic and OpenAI," he said. The financing package comes on the heels of Anthropic's confidential US IPO filing, as it attempts to beat rival OpenAI to a public market debut later this year. The Claude developer raised $65 billion in a funding round late last month that valued the firm at $965 billion including the new investment. Deal structure In this type of financing structure, a special-purpose vehicle raises capital through a mix of debt and equity to purchase the chips, which are then leased to a customer. The debt is primarily backed by the resulting lease payments, along with the unknown long-term value of the chips. In this case, the $35 billion debt facility was structured across three tranches. The senior layers -- the $6 billion notes dubbed A1 and $24 billion of A2 notes -- are backed by Broadcom, allowing the debt to secure lower borrowing costs aligned with Broadcom's strong credit profile. The notes received private ratings in the mid-investment grade tier. The A1 tranche was sold to a group of banks at a coupon of 1 percentage point over Treasuries, while the A2 notes priced at par with a 5.75% coupon, the people said. Buyers of the A2 tranche included institutional investors like Apollo's Athene insurance arm, which favors high-quality debt to back its long-term liabilities. The third tranche -- $4.5 billion of B notes -- doesn't carry the Broadcom backing and sold with an 8.5% coupon at par, according to the people. In addition to the debt, Apollo's Atlas SP Partners' structured-finance unit provided $800 million in equity, meaning it's effectively the owner of the SPV, said the people. Residual support A key feature of the deal is Broadcom providing a "residual value support" agreement. That means that if Anthropic fails to make the lease payments for a certain period of time, the SPV will sell the chips to pay back the debt investors. If the value of the chips doesn't make the debt investors whole, then Broadcom will make up the shortfall for 100% of the value owed to the A1 and A2 investors. This type of residual value feature has been used in another mega debt deal, though it financed the construction of a data center rather than chips. Meta Platforms Inc. provided a similar protection for the value of its Hyperion facility in Louisiana -- a transaction that Morgan Stanley arranged. That allowed the so-called Beignet bonds to trade in line with Meta's corporate debt.

Anthropic And OpenAI Are So Desperate For Compute They Let Broadcom Finance Their Own Chips For Them - Br

Broadcom Inc. (NASDAQ:AVGO) CEO Hock Tan said Wednesday the company is helping finance custom artificial intelligence chips for large language model developers, highlighting the enormous infrastructure costs facing AI companies such as Anthropic and OpenAI as they race to scale their models. Apollo, Blackstone To Help With Financing The initiative is expected to deploy more than 20 gigawatts of compute capacity by 2028, with Apollo launching the platform's first $35 billion tranche. Tan said the effort is aimed at addressing rapidly growing demand from AI customers, which are consuming increasingly large volumes of tokens as model usage scales. "....creating in partnership with guys, with the best balance sheets around, a vehicle to basically have these chips funded for these LLM players who otherwise might have difficulty getting access to our technology, which provides them with the lowest power and the lowest cost," Tan added. AI Customers Lock In Compute Capacity Years In Advance Securing AI computing capacity now requires years of planning, with customers needing to coordinate chip production, memory supply, power availability and data center infrastructure before deploying new systems. Broadcom's customers are placing orders well ahead of deployment timelines, Tan said, giving greater visibility into future demand than is typical in the semiconductor industry. He added that the demand visibility now extends through 2028, compared with 2027 just three months ago, reflecting growing confidence in long-term AI infrastructure spending. Broadcom's earnings, outlook top analysts' expectations Broadcom topped earnings expectations in the second quarter, reporting adjusted earnings of $2.44 per share versus analyst estimates of $2.40 per share. Revenue was $22.19 billion, narrowly missing consensus expectations of $22.27 billion. The company also issued a strong outlook, projecting third-quarter revenue of roughly $29.4 billion, above estimates of $28.54 billion, and adjusted EBITDA equal to about 68% of revenue. Price Action: Broadcom shares fell 13.78% to $413.21 in after-hours trading after closing Wednesday's session 0.49% higher, according to Benzinga Pro. Benzinga Edge Stock Rankings indicate AVGO has a Momentum score in the 90th percentile and a Quality score in the 96th percentile, with the stock demonstrating strength across short, medium and long-term time frames. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Broadcom CEO Hock Tan Says AI Isn't Hurting Software Business: 'We're Not Seeing It' - Broadcom (NASDAQ:A

AI Demand Is Driving VMware Growth Speaking during Broadcom's fiscal second-quarter earnings call, Tan said the company is seeing stronger momentum in its infrastructure software business, particularly from VMware, as customers expand computing capacity to support AI workloads. "We're not seeing it," Tan said when asked whether AI or agentic AI was affecting software growth and renewals. Instead, he pointed to rising hardware demand as a tailwind. "If anything else, as I reported, the high volume of core count of CPUs selling together with GPUs, it's driving some accelerated growth of our VMware business," Tan said. According to Tan, Broadcom expects this momentum to continue as enterprises increase spending on AI infrastructure over the coming quarters. Broadcom Sees No Long-Term Threat From AI To Software Business Tan said Broadcom's software portfolio remains closely tied to the infrastructure layer of computing, making it less vulnerable to disruption from emerging AI applications. "As you can see in Q3, we're seeing accelerated growth, and we expect that to continue, I guess, for the next multiple quarters as this demand picks up," he said. Looking further out, Tan signaled confidence in the durability of Broadcom's software strategy. "Given the kind of products we do in infrastructure software, very close to literally the hardware, basically the hypervisor, which is where our products are, we do not expect to see any impact on software products," Tan said. Broadcom Earnings Beat, Q3 Outlook Tops Estimates Broadcom posted second-quarter revenue of $22.19 billion, slightly below Wall Street expectations of $22.27 billion. However, the chipmaker reported adjusted earnings of $2.44 per share, topping analyst estimates of $2.40 per share. Looking ahead, Broadcom forecasts third-quarter revenue of about $29.4 billion, ahead of consensus estimates of $28.54 billion, while projecting adjusted EBITDA to account for 68% of expected revenue. Jensen Huang Says AI Boom Benefits Software Firms Speaking during his keynote at Computex in Taiwan, Huang said advances in agentic AI are driving significant breakthroughs, particularly in how AI systems use tools. "A lot of people have said, 'Jensen, AI is coming. Agentic AI is coming. Therefore, all of the software companies are going to go out of business.' I said it's exactly the opposite," he said at the time. Price Action: After-hours trading saw Broadcom shares plunge 13.78% to $413.21 after the stock closed Wednesday's session up 0.49% at $479.23, according to Benzinga Pro. Benzinga Edge Stock Rankings place AVGO in the 96th percentile for Quality, with the stock demonstrating strength across short, medium and long-term time frames. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Michael Vi on Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Apollo leads $35bn financing for Broadcom AI platform By Investing.com

NEW YORK - Apollo Global Management (NYSE:APO) announced Monday that Apollo-managed funds are leading a $35 billion capital solution for Broadcom's (NYSE:AVGO) AI XPV Platform, in partnership with Blackstone (NYSE:BX) and global banks. Blackstone, with a market capitalization of $140.5 billion, currently trades below its InvestingPro Fair Value, suggesting potential upside for investors. The alternative asset manager maintains a 4.1% dividend yield and has sustained dividend payments for two decades, according to InvestingPro data. The platform is designed to enable over 20 gigawatts in compute capacity for frontier AI labs through 2028, according to a press release statement. The initial transaction will facilitate Anthropic's previously announced capacity expansion of more than 1 gigawatt of compute infrastructure for training and inference starting in mid-2026. The financing represents what Apollo described as the largest private financing ever executed. The transaction involves a multi-year draw schedule and combines Apollo's High-Grade Capital Solutions, Apollo Capital Solutions and ATLAS SP Partners. "Broadcom and Anthropic are world-class companies operating at the frontier of technological innovation, and we are proud to have led the largest private financing ever executed," said Apollo Partner Jamshid Ehsani. Won Kim, Head of Corporate Development and AI Infrastructure Partnerships at Broadcom, said the transaction serves as the first pillar of the XPV Platform. Goldman Sachs, Wells Fargo and Citi advised Apollo on the transaction. Wells Fargo is serving as Global Coordinator, Joint Bookrunner and Joint Lead Arranger for the A1 tranche, while BNP Paribas, Citi and UBS are serving as Joint Bookrunners and Joint Lead Arrangers. Goldman Sachs, Bank of America and Morgan Stanley are serving as Joint Placement Agents on the A2 tranche. Morgan Stanley is serving as lead advisor to Broadcom, with JPMorgan Chase as co-advisor. As of March 31, 2026, Apollo had approximately $1.03 trillion of assets under management. In other recent news, Broadcom Inc. has announced the launch of the AI XPV Platform, supported by Apollo and Blackstone's Credit & Insurance Business as initial anchor investors. The platform begins with a $35 billion transaction led by Apollo, in collaboration with Blackstone, to enhance Anthropic's compute infrastructure. Meanwhile, Blackstone Inc. is reportedly looking to sell over $2 billion of its stakes in private investment funds, packaging them into bonds for sale to investors, including insurers. Additionally, Blackstone has decided to limit redemptions from its Bcred private-credit fund to 5% in the second quarter, despite receiving redemption requests for 10% of shares, totaling $4.4 billion. The firm had previously chosen to fulfill all redemption requests in March. In related developments, Partners Group, a Swiss asset manager, is experiencing increased withdrawal requests from its funds, with Blackstone also capping withdrawals at its flagship fund, highlighting stress in private funding markets. Furthermore, Liftoff Mobile Inc., a Blackstone-backed company, successfully raised $437 million in its U.S. initial public offering, selling shares above the marketed range. Liftoff's shares rose 9.1% on their debut, valuing the company at $4.18 billion based on outstanding shares. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Broadcom's AI Revenue Doubled -- And It May Not Even Be Halfway Done - Broadcom (NASDAQ:AVGO)

* AVGO stock is moving. See the chart and price action here. The company reported $8.4 billion in AI semiconductor revenue in Q1 FY2026, up 106% year over year -- and that wasn't even the headline. CEO Hock Tan guided Q2 AI revenue to $10.7 billion, a figure that, annualized, puts Broadcom on track for more than $40 billion in AI chip sales this fiscal year alone. Consider that the entire AI semiconductor market barely existed on Broadcom's income statement three years ago. $73 Billion AI Backlog The foundation for the growth is custom silicon. Broadcom builds application-specific accelerators, known as XPUs, tailored precisely to the workload demands of individual hyperscalers. Meta Platforms' (NASDAQ:META) MTIA accelerator runs on Broadcom silicon. So does infrastructure for Anthropic, ByteDance and OpenAI, which signed a multi-year collaboration in October 2025 for chips targeting deployment in the second half of 2026. Apple Inc. (NASDAQ:AAPL) is widely expected to be next, reportedly partnering with Broadcom on a custom AI server chip codenamed Baltra. The customer roster is what makes the numbers so striking -- and what makes the forward projections harder to dismiss as hype. Citi projects Broadcom's total AI revenue will reach $115 billion in fiscal 2027 and $180 billion in fiscal 2028, which would represent roughly 81% of the company's total sales. Underpinning the outlook is a $73 billion AI backlog -- larger than Broadcom's entire fiscal 2025 revenue base -- with delivery scheduled over approximately the next 18 months. Broadcom's Moat Broadcom's competitive moat is unusually deep. Custom chip design requires years of co-engineering with the customer, deep process-node expertise and the ability to manage an entire system. Heading into the Q2 print, the question isn't whether Broadcom is an AI winner -- it's whether Broadcom stock's 93.5x P/E already reflects the full runway. If Citi's numbers are even directionally right, the answer may still be no. AVGO Price Activity: Broadcom shares were up 1.34% at $488.00 at the time of publication on Wednesday. The stock is trading near its 52-week high of $488.82, according to Benzinga Pro data. This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Broadcom, Apollo, Blackstone Launch $35 Billion AI Infrastructure Platform

Broadcom said it will partner with Apollo Global Management and Blackstone's credit and insurance business to launch a platform backed by an initial $35 billion to finance artificial-intelligence infrastructure. The platform, called the AI XPV Platform, will enable more than 20 gigawatts in compute capacity through 2028, employing Broadcom's chips and networking solutions to support companies including Anthropic and OpenAI. Broadcom said Tuesday that the platform's initial $35 billion tranche will facilitate Anthropic's previously-announced capacity expansion of more than 1 gigawatt of compute infrastructure. Looking ahead, the platform will establish a framework for future deployments of XPU-based compute capacity and networking infrastructure aimed at lowering the cost and power requirements of AI model training and inference, it added. Chief Executive Hock Tan said the platform combines Broadcom's technology roadmap with long-term capital to support the growing demand for AI computing infrastructure. Apollo noted its participation as a primary capital partner, along with Blackstone, reflects the growing role that private capital is playing in financing digital-infrastructure buildouts.

Broadcom 2Q Revenue Climbs on AI Chip Demand

Broadcom logged higher revenue in its latest quarter driven by demand for its artificial-intelligence chips. The semiconductor and software maker on Wednesday posted a second-quarter profit of $9.31 billion, or $1.91 a share, compared with $4.97 billion, or $1.03 a share, a year earlier. Adjusted earnings per share were $2.44, compared with estimates of $2.40 a share according to analysts polled by FactSet. Revenue climbed 48% to $22.19 billion, compared with analyst estimates of $22.13 billion. Semiconductor revenue from AI more than doubled to $10.8 billion in the quarter, boosted by increasing demand for custom AI accelerators and AI networking, Chief Executive Hock Tan said. That momentum has continued into the current quarter, Tan said, forecasting semiconductor revenue from AI will more than triple to $16 billion. Broadcom forecasts overall revenue of $29.4 billion for the current third quarter, compared with analysts' projection of $28.25 billion.