No Surprises In Broadcom’s (NASDAQ:AVGO) Q2 Sales Numbers, Inventory Levels Improve

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No Surprises In Broadcom’s (NASDAQ:AVGO) Q2 Sales Numbers, Inventory Levels Improve Petr Huřťák Wed, September 2, 2026 at 4:38 PM EDT 4 min read AVGO Fabless chip and software maker Broadcom (NASDAQ:AVGO) met Wall Street's revenue expectations in Q2 CY2026, with sales up 85.5% year on year to $29.59 billion. On the other hand, next quarter's revenue guidance of $34.8 billion was less impressive, coming in 1.1% below analysts' estimates. Its non-GAAP profit of $3.32 per share was 2.5% above analysts' consensus estimates. Is now the time to buy Broadcom? Find out in our full research report . Revenue: $29.59 billion vs analyst estimates of $29.48 billion (85.5% year-on-year growth, in line) Adjusted EPS: $3.32 vs analyst estimates of $3.24 (2.5% beat) Adjusted Operating Income: $20.1 billion vs analyst estimates of $19.68 billion (67.9% margin, 2.1% beat) Revenue Guidance for Q3 CY2026 is $34.8 billion at the midpoint, below analyst estimates of $35.2 billion Operating Margin: 53.9%, up from 36.9% in the same quarter last year Free Cash Flow Margin: 46.2%, up from 44% in the same quarter last year Inventory Days Outstanding: 45, down from 74 in the previous quarter "Demand for our custom AI accelerators and networking continues to be very strong. Q3 AI semiconductor revenue of $16.7 billion grew 221% year-over-year, and 54% quarter-over-quarter," said Hock Tan, President and CEO of Broadcom Inc. "In Q4 the momentum continues, and we expect AI semiconductor revenue to accelerate to $21.7 billion, up 236% year-over-year." 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. A company's long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Broadcom's sales grew at an incredible 27.4% compounded annual growth rate over the last five years. 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 38% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. This quarter, Broadcom's year-on-year revenue growth of 85.5% was magnificent, and its $29.59 billion of revenue was in line with Wall Street's estimates. Company management is currently guiding for a 93.2% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 78% 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 spur better top-line performance. ALSO WORTH WATCHING: Nvidia's Quiet Partner. Nvidia's chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don't make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE . 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 45, which is 18 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup. We were impressed by Broadcom's strong improvement in inventory levels. We were also glad its EPS outperformed Wall Street's estimates. On the other hand, its revenue guidance for next quarter slightly missed. Zooming out, we think this was a mixed quarter. Investors were likely hoping for more, and shares traded down 4.1% to $352.53 immediately following the results. Is Broadcom an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free .

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