Broadcom Inc.

NASDAQ Global Select
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Bullish +72

Broadcom delivers strong earnings view as CEO touts growth with AI labs - cnbc.com

AI-generated analysis

📈 Broadcom reported Q3 adjusted EPS of $3.32, beating the $3.24 analyst consensus estimate.

💰 Total revenue reached $29.59 billion, slightly above the expected $29.36 billion.

🚀 Semiconductor revenue surged 86% year-over-year to $16.7 billion, exceeding the $15.2 billion average estimate.

🤝 CEO Hock Tan confirmed expanding custom chip business with OpenAI, Anthropic, and Google.

🔮 Management projects AI revenue will double to $115 billion in fiscal 2027 and reach $230 billion in fiscal 2028.

⚙️ The company is delivering tens of billions of dollars of processors to Google annually for the next several years.

📉 Q4 revenue guidance was set at $34.8 billion, slightly below the $35.03 analyst consensus.

💻 Infrastructure software revenue came in at $8.75 billion, just under the $8.82 billion consensus.

📊 Broadcom shares gained 6% in 2026 but have lagged the S&P 500's 12% gain year-to-date.

💸 The company is exploring residual value guarantees to support AI labs' upfront infrastructure investments.

Bullish Signals
  • Broadcom delivered Q3 adjusted EPS of $3.32, beating the $3.24 analyst consensus estimate.
  • Semiconductor revenue surged 86% year-over-year to $16.7 billion, significantly exceeding the $15.2 billion average estimate.
  • The company confirmed expanding custom chip business with major AI labs including OpenAI, Anthropic, and Google.
  • Management projects AI revenue will double to $115 billion in fiscal 2027 and reach $230 billion in fiscal 2028.
  • CEO Hock Tan confirmed delivering tens of billions of dollars of processors to Google annually for the next several years.
  • Net income more than tripled year-over-year to $13.09 billion, demonstrating strong profitability growth.
Risk Factors
  • Broadcom issued a disappointing revenue forecast for the current quarter, missing analyst expectations for Q4 guidance of $35.03 billion with a projection of only $34.8 billion.
  • Infrastructure software revenue came in at $8.75 billion, falling slightly short of the $8.82 billion consensus estimate.
  • Broadcom shares have lagged the broader S&P 500 index this year, gaining only about 6% compared to the index's 12% rise as of Wednesday's close.
Full Analysis
Broadcom reported fiscal third-quarter results that exceeded analyst expectations for earnings per share and revenue, despite issuing a slightly lower-than-expected revenue forecast for the current quarter. The company's adjusted EPS of $3.32 beat the consensus estimate of $3.24, while total revenue reached $29.59 billion against an expected $29.36 billion. Net income more than tripled year-over-year to $13.09 billion, driven by a 86% surge in semiconductor revenue to $16.7 billion. CEO Hock Tan highlighted robust long-term growth prospects tied to artificial intelligence partnerships with major labs like OpenAI, Anthropic, and Google. While the company provided a conservative Q4 revenue outlook of $34.8 billion versus a consensus of $35.03 billion, management emphasized a rosy forecast for the next fiscal year. The stock edged higher in extended trading as investors digested the strong guidance and strategic expansion into custom AI chip deployments. Management outlined an aggressive roadmap for AI revenue, projecting a doubling to $115 billion in fiscal 2027 and another doubling to $230 billion in fiscal 2028. Tan confirmed significant ongoing shipments of custom chips, including Jalapeno units for OpenAI and TPU 8i chips for Google, with plans to deliver tens of billions of dollars worth of processors annually. The company is also exploring residual value guarantees to support its strategic customers' massive upfront infrastructure investments. Despite the strong fundamentals, Broadcom shares have underperformed the broader S&P 500 index this year, gaining only about 6% compared to the index's 12% rise as of Wednesday's close. The company's market capitalization has reached approximately $1.8 trillion since the end of 2022, coinciding with the generative AI boom. Infrastructure software revenue came in slightly below consensus at $8.75 billion, but the overall financial performance remains highly resilient.