Broadcom Goes Into Earnings Tonight. Here's Why I'm Not Selling Ahead of the Print

Broadcom reports Q2 FY2026 results tonight after the close. The street is looking for revenue of approximately USD 22 billion, up 47% year-on-year, and AI semiconductor revenue of USD 10.7 billion, up 140% from the same quarter last year. Those are the numbers that matter going into this print.

I hold AVGO and I have held it through multiple cycles. Let me explain why I am not selling ahead of tonight.

The Backlog Is the Thesis in One Number

Broadcom carries a USD 73 billion AI-related backlog into tonight's report. That is not speculative demand. It is contracted revenue representing signed agreements with hyperscalers for custom silicon they have committed to pay for. The two largest contracts are with Alphabet for Google TPU chips and Meta for custom AI silicon, both running multi-year agreements.

When a business has USD 73 billion in backlog, the question stops being "will they have revenue" and becomes "can they execute on delivery?" Broadcom's fab-less model, outsourcing manufacturing to TSMC, means they are not capacity-constrained in the same way a fully integrated chipmaker would be.

Hock Tan's $100 Billion Vision

CEO Hock Tan has stated the company has "line of sight" to AI revenue exceeding USD 100 billion in fiscal year 2027. If Q2 comes in at USD 10.7 billion, the annualised run rate is already approaching USD 43 billion. Closing the gap to USD 100 billion requires sustained acceleration. The backlog supports that trajectory.

The Risk I'm Holding Through

The implied options move on AVGO into this print is approximately 8%. A miss on AI revenue guidance, or any signal that hyperscaler custom ASIC orders are being re-evaluated, could produce a sharp drawdown even from already elevated levels.

I am holding because the backlog visibility is the clearest revenue signal I have in any position in my portfolio right now. That is worth the earnings event risk.