Broadcom AI Revenue Surge Masks a VMware Warning

Broadcom reported record AI chip revenue of $10.8 billion (143% YoY growth) and total revenue of $22.19 billion in Q2 FY2026, yet shares fell 3% after-hours. The decline was triggered by infrastructure software revenue missing expectations at $7.18 billion versus $7.32 billion consensus, and total revenue coming in $80 million below guidance. The VMware segment's 9% growth deceleration from Q1's 1% growth raises concerns about the funding engine for Broadcom's AI roadmap, despite strong contracted customer demand extending into 2028.