Broadcom Q3 2026 Earnings Report

Broadcom Surges on AI Bets, Outperforming Expectations with Strong Fiscal Outlook

Broadcom’s shares experienced a notable uptick in after-hours trading on Wednesday, propelled by a robust forecast for the upcoming fiscal year and clear indications of expanding business relationships with leading artificial intelligence laboratories. The semiconductor giant, a key player in the high-stakes AI hardware market, demonstrated its continued dominance by exceeding analyst expectations on both earnings per share and revenue for the past quarter.

In a strong showing that underscored its strategic positioning, Broadcom reported adjusted earnings per share of $3.32, surpassing the LSEG consensus estimate of $3.24. Revenue for the period reached $29.59 billion, also exceeding the projected $29.36 billion. This performance highlights Broadcom’s ability to navigate a complex and rapidly evolving technology landscape.

Looking ahead, Broadcom provided an optimistic outlook for its fourth fiscal quarter, projecting revenue of $34.8 billion. While this figure slightly trailed the LSEG analyst consensus of $35.03 billion, the overall sentiment remains strongly positive, buoyed by the company’s long-term growth narrative.

The company’s recent financial statements reveal a remarkable 86% year-over-year surge in revenue, climbing from $15.95 billion in the same period last year. This impressive top-line growth was accompanied by a more than threefold increase in net income, which soared to $13.09 billion, or $2.68 per share, from $4.14 billion, or 85 cents per share, a year prior. This expansion signals exceptional operational efficiency and pricing power in its core markets.

Broadcom has unequivocally emerged as a major beneficiary of the artificial intelligence revolution. The company has become an indispensable partner for tech behemoths such as Google, Meta, and OpenAI, designing highly specialized custom chips that are critical for powering their advanced AI models and services. Since the advent of generative AI technologies like ChatGPT in late 2022, Broadcom’s stock has seen a remarkable surge of over sixfold, catapulting its market capitalization to approximately $1.8 trillion. This trajectory positions Broadcom as a pivotal enabler of the next wave of technological innovation.

Despite its stellar performance, Broadcom’s stock has recently shown a more modest ascent compared to broader market indices this year. As of Wednesday’s close, Broadcom shares had appreciated by approximately 6% in 2026, while the S&P 500 index recorded a more substantial gain of 12% over the same period. This divergence suggests that while Broadcom is a significant AI growth story, market sentiment may be recalibrating its valuation relative to the wider economic recovery.

During the recent fiscal quarter, Broadcom highlighted key product developments and customer engagements. The company’s collaboration with OpenAI on the custom “Jalapeno” chip, designed for AI inference and training, was a significant point of discussion. Furthermore, Apple announced plans to increase its spending with Broadcom for U.S.-based chip production, signaling a deepening strategic partnership and a commitment to diversifying its supply chain.

In a conference call with analysts, Broadcom CEO Hock Tan provided granular insights into the company’s AI business pipeline. He indicated an accelerated pace in shipments of Google’s Ironwood Tensor Processing Units (TPUs) to Anthropic, alongside the deployment of TPU 8i chips to Google. This reinforces Broadcom’s role as a critical supplier for Google’s ambitious AI infrastructure initiatives.

“We anticipate delivering tens of billions of dollars worth of processors to Google annually for the next several years,” Tan stated, underscoring the long-term nature of these crucial supply agreements.

The company also confirmed continued shipments of its “Jalapeno” processors to OpenAI, with production volumes expected to grow. For Meta, Broadcom is gearing up for production shipments of custom MTIA accelerators, meticulously optimized for inference and large-scale recommendation systems.

Looking further ahead, Broadcom is forecasting significant deployment of its TPU 8i chips by Anthropic, with an initial deployment of 5 gigawatts anticipated in 2027, and a clear line of sight for an additional 10 gigawatts. OpenAI is reportedly preparing for the tape-out of its second-generation AI chip, and is actively collaborating with Broadcom on plans for a third iteration. Broadcom itself is projecting a 1.3-gigawatt deployment of its Jalapeno chips in 2027, with potential for over 5 gigawatts for both Jalapeno and its second-generation successor.

The company has set ambitious targets for its AI segment. Tan projected that by fiscal year 2027, Broadcom aims to double its AI revenue to an impressive $115 billion, with plans for another doubling to $230 billion by fiscal year 2028. This aggressive growth trajectory is underpinned by a projected earnings per share of over $30 for fiscal year 2028, significantly exceeding the LSEG consensus estimate of $25.86.

Amie Thuener, Broadcom’s Chief Financial Officer, elaborated on the strategic rationale behind these investments. “We are empowering two of our most strategic customers, the leading AI labs, to bridge the gap between their current cash flow and the significant upfront investments required for their businesses,” Thuener explained. She also alluded to the possibility of Broadcom providing residual value guarantees as contingent liabilities to these AI labs, a move that could de-risk major capital expenditures for its key partners.

“It makes economic sense for Broadcom to invest and enable these players,” Tan concluded, emphasizing the mutually beneficial nature of these deep strategic partnerships.

Breaking down the revenue segments, Broadcom’s semiconductor division reported a more than threefold increase, reaching $16.7 billion, surpassing the StreetAccount average estimate of $15.2 billion. However, revenue from infrastructure software came in slightly below expectations at $8.75 billion, compared to the StreetAccount consensus of $8.82 billion among polled analysts. This segment’s performance, while strong in absolute terms, lagged the explosive growth seen in the semiconductor arm.