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benzinga.comJUN 44 min read$AVGOBullishMed

Broadcom CEO Hock Tan Says AI Isnt Hurting Software Business: Were Not Seeing It - Broadcom (NASDAQ: A

Broadcom CEO Hock Tan said on the company’s fiscal Q2 earnings call that AI demand is not hurting its software business, citing stronger VMware momentum as customers add CPU and GPU capacity for AI workloads. Tan said Broadcom expects this to continue. Broadcom reported Q2 revenue of $22.19B (vs $22.27B est.) and adjusted EPS of $2.44 (vs $2.40). It forecast Q3 revenue of ~$29.4B (vs $28.54B est.).

AI DeskJune 4, 2026
AI analysis
Relevance
9/10
Novelty
6/10
Actionability
Med
Sentiment · $AVGO
Bullish
Timing
after-hours reaction to Broadcom’s Q2 results and Q3 outlook (published pre-market)
Market alignment
Management reassurance on software durability aligns with AI infrastructure demand narrative, but the -13.78% after-hours move signals sentiment is fragile.
Why this matters for $AVGO

Management is explicitly defending software/VMware renewals against AI-disruption fears while reaffirming near-term momentum.

Relevance context

Broadcom CEO Hock Tan said AI/agentic AI is not hurting VMware software growth, citing stronger VMware momentum tied to AI infrastructure demand.

Price-impact prediction

Likely supports downside risk control for AVGO software/VMware expectations, but after-hours drop suggests market is still digesting the earnings mix.

Background

The piece centers on Broadcom’s fiscal Q2 earnings call remarks and a separate AI comment from Jensen Huang at Computex, framing AI as an infrastructure tailwind rather than a software threat.

Why it matters

Management explicitly addressed a key investor concern—whether AI/agentic AI is impacting software growth/renewals—and tied VMware strength to ongoing enterprise AI infrastructure buildouts. It also reiterates Q3 revenue and adjusted EBITDA expectations that beat consensus.

Market relevance

AVGO provides guidance and qualitative reassurance on VMware/software durability amid AI demand, but the after-hours selloff indicates investors may be reacting to the earnings details beyond the AI narrative.

Market effects

Sector

Reinforces the read-across that AI capex is benefiting infrastructure software (hypervisor/virtualization) rather than displacing it.

Regional

Limited; commentary given on an earnings call and a Taiwan keynote, with the immediate driver being AVGO’s own guidance.

Global

Broadens the AI infrastructure demand thesis for enterprise software tied to hardware/virtualization stacks.

Alternative perspectives

Contrarian view

The stock’s large after-hours decline suggests investors may be focused on other segments/margins or the earnings mix, so the “AI not hurting software” message may not offset perceived risks.

Overlooked factors

VMware growth is attributed to CPU+GPU core-count hardware demand; if AI infrastructure spending slows, the software momentum could decelerate even if AI applications don’t directly cannibalize renewals.

Key entities

  • public_company
    Broadcom

    CEO Hock Tan stated AI is not hurting Broadcom’s software business/VMware renewals and expects momentum to continue.

  • business_unit
    VMware

    Broadcom’s infrastructure software segment cited as seeing accelerated growth driven by AI workload capacity expansion.

  • person
    Jensen Huang

    Commented that agentic AI benefits software firms rather than eliminating them.

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