NEW YORK, March 5, 2026, 12:43 p.m. ET — Regular session
- Broadcom gained roughly 4% midday, with investors reacting to fresh longer-term AI chip revenue targets from the company.
- Management raised its short-term outlook and unveiled a new $10 billion buyback plan.
- U.S. equities slipped, with heightened energy-price risk from the Middle East conflict leaving investors on edge before Friday’s payrolls report.
Broadcom shares climbed 4.3% to $331.12 as of 12:35 p.m. ET, having bounced between $323.54 and $342.14 earlier in the day.
Broadcom jumped after it positioned itself as set to gain more from data-center expansion, despite ongoing skepticism over whether Big Tech’s AI bets will deliver. Summit Insights analysts described Broadcom’s prospects as “broadening rather than peaking,” while Melius Research flagged around 10 gigawatts of AI demand in 2027, citing customers like Anthropic and Meta. Reuters
Broadcom came out late Wednesday with a second-quarter revenue outlook of around $22.0 billion, topping what analysts were looking for, and sees AI chip sales hitting $10.7 billion. CEO Hock Tan told analysts there’s “line of sight” to AI chip revenue surpassing $100 billion in 2027, after AI revenue in the latest quarter more than doubled to $8.4 billion. D.A. Davidson’s Gil Luria called the company’s unusually long-range guidance on demand both rare and a positive sign. Reuters
Custom processors are central to the argument here: specialized chips built for a specific task, meant to supplement—or in some cases, take over from—the expensive general-purpose AI chips that have become standard in data centers. Supply chain issues come into play as well. High-bandwidth memory, which sits next to AI processors as stacked memory, has been a persistent choke point for the industry.
Broadcom put emphasis on rewarding shareholders, greenlighting a fresh $10 billion buyback plan set to run through Dec. 31, 2026. The quarterly dividend stays unchanged at $0.65 per share. Free cash flow for the quarter came in at $8.01 billion, with the company saying it handed back $10.9 billion to investors via dividends and buybacks. PR Newswire
Elsewhere, the tape wasn’t as cooperative. Major indexes on Wall Street slipped while the Middle East conflict rolled into its sixth day, fueling concerns about pricier energy and shipping—potential triggers for stubborn inflation and new headaches for the Fed. “If energy stays expensive, inflation could start climbing again and that would force the Fed to rethink its plans,” said Adam Sarhan, chief executive of 50 Park Investments. Reuters
This trade isn’t bulletproof. Should AI capital spending tap the brakes, or if component shortages start to pinch shipments, Broadcom’s longer-term target gets shakier—and that hefty stock premium could unravel quickly.
Investors have their eyes on two things right now: Broadcom’s post-earnings rally and whether it lasts through the session, plus Friday’s U.S. non-farm payrolls—a data point that could shake up rate bets as energy prices remain unsettled.
