Broadcom Inc. (NASDAQ: AVGO) said that its first quarter of fiscal year 2026, which ended on February 1, 2026, was the best ever, with total revenue reaching $19.3 billion. This was a strong 29% increase from the same time last year, when it was $14.9 billion. It was more than what analysts and the company had predicted.
The company’s AI semiconductor solutions saw explosive growth, which was the main reason for the performance. AI sales for the quarter reached $8.4 billion, more than double what they were in the same quarter last year (up 106%). The rise was caused by a lot of people wanting custom AI accelerators (also known as XPUs) and AI networking products. This is because hyperscalers and big cloud providers are deploying generative AI and large-scale models more and more.
In a statement, CEO Hock Tan talked about the momentum: “Broadcom had record first-quarter revenue thanks to strong sales of AI semiconductor solutions.” Our prediction was for $8.4 billion in AI revenue in Q1, but it actually grew 106% year-over-year, thanks to strong demand for custom AI accelerators and AI networking. The growth of our AI revenue is speeding up, and we think that AI semiconductor revenue will reach $10.7 billion in Q2.
Broadcom had great margins during the growth, which is a good sign for profits. Adjusted EBITDA went up 30% from last year to a record $13.1 billion, which is 68% of revenue. The gross margin was 77%, and the operating income was at an all-time high. This shows that the company was able to make a lot of money from its high-margin AI products because it was able to scale up its operations.
The Semiconductor Solutions part of the company, which includes AI chips and other networking and connectivity products, grew a lot to about $12.5 billion, which is about 52% more than the previous year. The Infrastructure Software segment, which includes VMware and mainframe software, stayed pretty stable at about $6.8 billion, with a small increase from last year.
Broadcom also gave shareholders good returns on their investments. The business made a lot of free cash flow and gave back $10.9 billion in the quarter, with $3.1 billion in dividends and $7.8 billion in stock buybacks. The board said that shareholders who own shares on March 23, 2026, will get a quarterly dividend of $0.65 per share on March 31, 2026. The board also approved a new $10 billion share buyback plan that will last until the end of 2026.
Looking ahead, Broadcom gave good news for the second quarter of fiscal 2026 (ending May 2026), saying that consolidated revenue would be about $22.0 billion, which is a 47% increase from the previous year. It is expected that adjusted EBITDA will stay at about 68% of sales. Within that, semiconductor sales are expected to be about $14.8 billion (up 76% from last year), and AI semiconductor sales are expected to be about $10.7 billion (up about 140% from last year).
The results show that Broadcom is becoming more and more involved in the AI infrastructure boom. It is now one of the main beneficiaries of the huge investments in AI data centers, along with companies like NVIDIA. After the March 4, 2026, announcement, AVGO shares went up in extended trading. This shows that investors are confident in the company’s AI path and ability to make money.
Broadcom is still following its plan to combine top-notch semiconductor design with infrastructure software to make money in fast-growing fields like AI, cloud computing, and enterprise networking. The company looks ready for more growth in the next few quarters because it has multi-year supply agreements in place and demand is rising.
