Broadcom's AI revenue rises 221 per cent to 16.7 billion dollars while its quarterly guidance trails expectations
Broadcom's third fiscal quarter, which ended on 2 August 2026, brought net revenue of 29.591 billion dollars, 86 per cent above a year earlier, with AI semiconductor revenue up 221 per cent at 16.7 billion dollars. The company guided fourth-quarter revenue to approximately 34.8 billion dollars and a non-GAAP operating margin of approximately 66 per cent of projected revenue. SiliconANGLE reported that the forecast trailed Wall Street expectations and that the shares slipped in late trading.
Economics & Markets··Morning
The AI semiconductor line reaches 16.7 billion dollars in the quarter
Broadcom reported net revenue of 29.591 billion dollars for the third fiscal quarter ended 2 August 2026, 86 per cent above the same period a year earlier. AI semiconductor revenue came to 16.7 billion dollars, 221 per cent higher year over year and 54 per cent higher than the previous quarter, and SiliconANGLE reported that the line passed the 15.2 billion dollars the market expected. Semiconductor solutions revenue reached 20.839 billion dollars, equal to 70 per cent of the total and above the 9.166 billion dollars that made up 57 per cent a year earlier. Infrastructure software revenue rose 29 per cent to 8.752 billion dollars, which SiliconANGLE placed just below the 8.82 billion dollars of consensus. Non-GAAP operating income was 20.095 billion dollars and free cash flow 13.665 billion dollars, equal to 46 per cent of revenue. Non-GAAP diluted earnings per share rose to 3.32 dollars from 1.69 dollars, above the 3.24 dollars analysts expected. The board declared a quarterly dividend of 0.65 dollars per share.[1], [2]
The fourth-quarter forecast is 34.8 billion dollars and the shares slip late
Broadcom guided fourth-quarter revenue to approximately 34.8 billion dollars and a non-GAAP operating margin of approximately 66 per cent of projected revenue. Chief executive Hock Tan said demand for the company's custom AI accelerators and networking remained very strong and that AI semiconductor revenue is expected to reach 21.7 billion dollars in the fourth quarter, 236 per cent above the prior-year period. SiliconANGLE reported that the forecast for the current quarter still trailed Wall Street expectations, that the shares declined almost 2 per cent in late trading after the report, and that the stock is up 6 per cent in the year to date against a 12 per cent gain for the S&P 500 index. In the quarter just reported, GAAP operating income rose to 15.955 billion dollars from 5.887 billion dollars and GAAP diluted earnings per share to 2.68 dollars from 0.85 dollars, while cash from operations was 14.197 billion dollars against capital expenditure of 0.5 billion dollars.[1], [2]
Tan maps out shipments to the AI labs into 2027
Hock Tan told analysts on the conference call that Broadcom hopes to speed up delivery of Google's newest Ironwood tensor processing units to Anthropic and to Google itself, and that he expects the company to ship tens of billions of dollars of processors to Google each year. He said Anthropic should deploy about 5 gigawatts of Google's TPU8i processors next year, with line of sight to a further 10 gigawatts later, while OpenAI is preparing to tape out a second-generation Jalapeno chip, the custom processor Broadcom revealed during the quarter, and is expected to deploy about 1.3 gigawatts of it in 2027. Apple has said it will commit more money to Broadcom's US chip production operations. Chief financial officer Amie Thuener said the company is empowering two of its most strategic customers, the leading AI labs, to bridge the gap between their current cash flow and the significant upfront investments their businesses require, and Tan said Broadcom is considering residual value guarantees, which are contingent liabilities, for those two customers.[2], [1]
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