Broadcom AI Chips Revenue Surges 86% to $29.6B as OpenAI, Google, Anthropic Drive Custom Accelerator Demand
23 Sources
[1]
Broadcom guides to big numbers but investors wanted more. Why we're OK to hold for now
Broadcom on Wednesday evening beat quarterly earnings expectations and provided a strong multiyear revenue forecast for its artificial intelligence custom chip business. Revenue in the fiscal third quarter of 2026, which ended Aug. 2, rose 85% year-over-year to $29.59 billion, a slight beat versus
[2]
Broadcom beats expectations as AI labs double down on custom chips
Broadcom beats expectations as AI labs double down on custom chips Custom chipmaker Broadcom Inc. beat expectations on earnings and revenue in its third-quarter financial report and hinted at the prospect of doing more business with leading artificial intelligence labs. However, its stock was
[3]
Broadcom's AI chip boom powers record quarter, shares waver - Broadcom's AI boom hits another gear
Broadcom's AI chip boom powers record quarter, shares waver 1/6 Broadcom's AI boom hits another gear Broadcom delivered a strong fiscal third-quarter performance, with revenue jumping 86% year-on-year to $29.6 billion. Surging demand for custom AI accelerators and networking chips drove the
[4]
Broadcom's AI Boom Has A Memory Problem - Broadcom (NASDAQ:AVGO)
Broadcom Inc. (NASDAQ:AVGO) is selling AI chips faster than ever. But the company just revealed an unexpected cost of that success: memory is squeezing its margins. The world's second biggest semiconductor company told investors on Wednesday that AI semiconductor revenue surged 221% year over year
[5]
Broadcom Q3 Results: CEO Tan Forecasts Surging AI Infrastructure Buildout
'This is, again, a carefully structured outlook that we believe we can achieve,' Broadcom CEO Hock Tan says. Broadcom CEO Hock Tan continues to see artificial intelligence-related spending roaring for at least the next few years, feeding demand for the vendor's XPUs and broader AI infrastructure
[6]
Broadcom AI chips: Broadcom raises AI chip forecast as Big Tech keeps writing bigger checks
They have gained about 6% this year, significantly underperforming rivals and the broader semiconductor index, as AI spending concerns and increased competition persist, including Marvell's recent custom chip deal with Google. Broadcom on Wednesday forecast strong AI chip sales for the next two
[7]
Broadcom CEO Says AI Demand Could Be 'Significantly' Higher -- But Land, Power, Chips and Substrates Are H
Broadcom Inc. (NASDAQ:AVGO) is positive on generating billions of dollars in AI revenue, but believes issues around supply chain constraints and the actual deployment of data centers remain. Demand Still Outpaces Supply Amid AI Boom When asked about business doubling next year but demand still
[8]
Broadcom's earnings loom, but this reveal came first
For many companies, timing their biggest product launches right before earnings is no accident. Two days ahead of its fiscal third report, Broadcom Inc. (AVGO) used a conference in Las Vegas, an event most investors ignore, to unveil a sweeping AI governance platform. The timing matters less than
[9]
Broadcom faces high-stakes earnings test as AI expectations soar - Broadcom's Big Earnings Test
Broadcom faces high-stakes earnings test as AI expectations soar 1/10 Broadcom's Big Earnings Test Broadcom is heading into its latest earnings report with investor expectations running high after Nvidia delivered a blockbuster quarterly performance. The semiconductor giant's results will be
[10]
Jim Cramer Sees Broadcom's Business Exploding as CEO Hock Tan Says Custom OpenAI Chip Beats Nvidia's Grac
Despite weak fourth-quarter guidance, Broadcom Inc.'s (NASDAQ:AVGO) management revealed a multi-year AI revenue outlook and touted its custom silicon, which "Mad Money" host Jim Cramer dubbed as an upcoming "explosion of business." Meanwhile, CEO Hock Tan claimed in the earnings call that
[11]
Broadcom at Goldman Sachs conference: ai growth meets supply limits By Investing.com
Broadcom (AVGO) used Tuesday, 08 September 2026, at the Goldman Sachs Communacopia + Technology Conference 2026 to outline a bullish long-term AI story, while also flagging real-world limits. Chief Executive Hock Tan said demand for custom AI chips is rising fast, but growth is being held back by
[12]
Why Broadcom CEO Called Anthropic and OpenAI 'Two Geniuses in Mongolia' - Broadcom (NASDAQ:AVGO)
Broadcom Inc. (NASDAQ:AVGO) CEO Hock Tan has an unusual way of explaining why the company is helping finance Anthropic's and OpenAI's AI infrastructure buildout: he compares them to two geniuses stranded in the middle of Mongolia who need help getting to college. Financing Two "Geniuses" On the
[13]
Broadcom earnings analysis: questions answered and next catalysts By Investing.com
Investing.com -- Broadcom's Q3 FY2026 earnings answered the demand question decisively: AI semiconductor revenue reached $16.7B, up 221% year over year. The stock fell because Q4 guidance was merely solid, while investors expected another outsized upside surprise. The Beat Was Real Broadcom Inc.
[14]
Broadcom disappoints despite soaring AI chip sales
Sales of AI-focused chips are expected to reach $21.7bn in Q4, slightly above the $21.33bn expected. In Q3 they more than tripled to $16.7bn, lifting total revenue to $29.59bn. Adjusted EPS came in at $3.32, as Broadcom continues to benefit from demand for custom processors used in AI
[15]
Broadcom CEO Hock Tan Says Anthropic 'On Track to Become Our Largest XPU Customer' as Google TPU Orders E
Broadcom Inc. (NASDAQ:AVGO) is positioning itself for a major expansion in custom AI chips as Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google ramps up its next-generation TPU technology and Anthropic plans to deploy 5 gigawatts of the chips in 2027. Broadcom's Google TPU Deal Expands During
[16]
Truist cuts Broadcom stock price target on software miss, AI outlook By Investing.com
Investing.com - Truist Securities lowered its price target on Broadcom Limited (NASDAQ:AVGO) to $520 from $550 while maintaining a Buy rating on the shares. The firm cited Broadcom's second-quarter results and third-quarter outlook as good but neither stellar nor completely clean. The company
[17]
Broadcom Is Top Pick For AI's Next Big Shift: Analyst - Broadcom (NASDAQ:AVGO)
Broadcom Inc. (NASDAQ:AVGO) stock traded nearly flat Wednesday. Investors awaited the company's fiscal third-quarter 2026 results, due after the closing bell on Sept. 2. Wall Street expects Broadcom to report adjusted earnings of $3.24 per share on revenue of $29.43 billion. Meanwhile,
[18]
KeyBanc reiterates Broadcom stock rating on raised AI outlook By Investing.com
Investing.com - KeyBanc reiterated an Overweight rating and $575.00 price target on Broadcom Limited (NASDAQ:AVGO) following the company's fiscal third-quarter results. Broadcom reported solid results for its fiscal third quarter ended in July and provided mixed guidance for its fiscal fourth
[19]
Broadcom slips as soft Q4 guide overshadows strong growth outlook: Buy the dip? By Investing.com
Investing.com -- Broadcom's pullback looks more like a valuation reset than a broken AI thesis: shares were $354.36 premarket, down 3.51% as of Sep 3, 2026, 8:23 AM EDT. The catch is simple -- near-term execution is being judged against extraordinary future growth. The Market's Complaint The
[20]
Raymond James raises Broadcom stock price target on AI growth outlook By Investing.com
Investing.com - Raymond James raised its price target on Broadcom Limited (NASDAQ:AVGO) to $475 from $450 while maintaining an Outperform rating. The stock currently trades at $367.24, and according to InvestingPro analysis, appears undervalued based on its Fair Value assessment, suggesting
[21]
Mizuho reiterates Broadcom stock rating on AI revenue growth outlook By Investing.com
Investing.com - Mizuho reiterated an Outperform rating and $530.00 price target on Broadcom Limited (NASDAQ:AVGO) following the company's latest quarterly results and forward guidance. The target aligns with the broader Wall Street consensus, where analysts maintain a bullish outlook with a high
[22]
Broadcom FY25 presentation: $64B revenue, AI growth accelerates By Investing.com
Broadcom Inc. (NASDAQ:AVGO) presented its fiscal year 2025 company overview on September 2, 2026, showcasing a business that has more than doubled its revenue since fiscal 2021 through a combination of strategic acquisitions and organic growth in artificial intelligence semiconductors. The
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Earnings call transcript: Broadcom tops Q3 2026 estimates as AI sales surge By Investing.com
Broadcom beat Wall Street's expectations in its fiscal third quarter, reporting adjusted earnings of $3.32 a share on revenue of $29.59 billion, above forecasts for $3.21 a share and $29.25 billion. The semiconductor and software company said sales rose 86% from a year earlier, driven by a sharp
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Broadcom reported fiscal Q3 2026 revenue of $29.59 billion, up 86% year-over-year, driven by surging demand for custom AI accelerators from OpenAI, Google, Anthropic, and Meta. CEO Hock Tan projects AI semiconductor revenue will reach $115 billion in fiscal 2027 and double again to $230 billion by 2028, though supply chain constraints and memory costs are pressuring gross margins.
Broadcom Reports Record Revenue Growth Driven by Custom AI Accelerators
Broadcom delivered fiscal third-quarter 2026 results that exceeded expectations, with revenue jumping 86% year-over-year to $29.59 billion, slightly above the consensus forecast of $29.36 billion
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. Adjusted earnings per share increased 96% to $3.32, beating expectations of $3.241
. Net income more than tripled to $13.09 billion from $4.14 billion a year earlier2
. The semiconductor business unit provided the lion's share of revenue, with sales tripling from a year earlier to $16.7 billion, surpassing the Street's $15.2 billion target2
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Source: Benzinga
AI semiconductor revenue specifically surged 221% year-over-year to $16.7 billion in the quarter
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. Broadcom expects AI semiconductor revenue to accelerate further to $21.7 billion in fiscal Q4, representing a 236% increase from a year earlier3
. Despite these strong results, Broadcom shares came under pressure in extended trading, declining almost 2% after initially dropping 7%1
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.CEO Hock Tan Projects Dramatic AI Revenue Growth Through 2028
Broadcom CEO Hock Tan provided an updated multiyear AI revenue guidance that addresses investor concerns about the company's long-term trajectory. Based on current fiscal fourth-quarter AI revenue guidance of $21.7 billion, Broadcom expects to generate $58 billion of AI revenue in fiscal year 2026, up from its prior view of $56 billion
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. More significantly, Tan updated the fiscal 2027 guidance to $115 billion from the previous target of at least $100 billion1
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Source: CRN
The headline number that captured market attention came when Tan projected AI revenue would double again in fiscal year 2028 to $230 billion
1
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. This longer-term outlook exceeded the FactSet consensus estimate of $177 billion1
. Tan also stated the company is on track to exceed earnings per share of $30 in fiscal year 2028, well above the FactSet consensus estimate of $26.381
. Importantly, this outlook incorporates not only chip supply expectations but also physical infrastructure constraints such as land, power, and data center shells1
.OpenAI, Google, Anthropic, and Meta Fuel Custom Chip Demand
Broadcom's AI infrastructure buildout is being driven by partnerships with leading AI labs including Google, Anthropic, OpenAI, and Meta Platforms
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. Tan expects Anthropic will be Broadcom's largest customer of XPUs over the next two years due to the expected 5 gigawatts of TPUs they plan to deploy, with line of sight into an incremental 10 gigawatts1
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. Computing power is measured in gigawatts because energy has become the limiting factor in AI infrastructure spending1
.
Source: Benzinga
With OpenAI, Broadcom is on track to deploy 1.3 gigawatts next year with line of sight to deploying 5 gigawatts of its new Jalapeno processor and successor generation XPUs in the future, making them the second largest XPU customer
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. OpenAI is now preparing to tape out its second-generation Jalapeno chip while developers are already working on concepts for a third generation2
. With Meta, the two companies are on track to deliver three generations of MTIAs, or Meta Training and Inference Accelerator, with line of sight to deploy 3 gigawatts through 20281
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.Tan defended Broadcom's partnership with Google amid recent concerns about share loss to competitors like Marvell and MediaTek. "Our partnership with Google will continue to sustain because we have the strongest IP portfolio in semiconductor design, including industry leading service chip to chip interconnect, leading-edge HBM [high-bandwidth memory] and SRAM [static random-access memory] integration, and simply differentiated advanced packaging," Tan said on the call
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. He expects to ship "tens of billions of dollars worth of processors" to Google each year for the next several years2
.Special Purpose Vehicle Enables AI Labs to Bridge Funding Gap
To support Anthropic and OpenAI in funding their deployments, Broadcom established a special purpose vehicle platform in partnership with Apollo and Blackstone to facilitate more than 20 gigawatts of compute infrastructure by the end of 2028
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. This SPV helps these frontier AI labs bridge a gap between their current cash flows and upfront investments1
. "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," said Broadcom Chief Financial Officer Amie Thuener2
. Tan added that Broadcom is considering providing "residual value guarantees" that are contingent liabilities to the two AI labs, explaining, "It makes economic sense for Broadcom to invest in and enable these guys"2
.Supply Chain Constraints and Memory Costs Pressure Gross Margins
Despite strong revenue growth, Broadcom faces headwinds from supply chain constraints and rising memory costs that are compressing gross margins. For the fourth quarter ending Nov. 1, Broadcom guided consolidated gross margin to approximately 73%, down from 78% in the same quarter a year ago
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. Gross margin ran at 77.1% in the second quarter, 75% in the third, representing 410 basis points of compression across two quarters during the fastest revenue growth Broadcom has ever posted4
.CFO Amie O'Toole explained the margin pressure: "This reflects the increasing mix of XPUs with their increasing memory content, which is diluting our consolidated gross margin"
4
. Conventional DRAM contract prices rose 90% to 95% quarter-over-quarter in the first quarter of 2026, the steepest single-quarter move research firm TrendForce has recorded, with NAND up 55% to 60% over the same stretch4
. TrendForce has projected DRAM pricing to climb more than 70% across the full calendar year4
. Three companies—SK Hynix, Micron Technology, and Samsung Electronics—control over 95% of DRAM output, and all three have tilted wafer capacity toward high-bandwidth memory4
.Tan told analysts on the call to "stop focusing on gross margin" and instead look at operating margin, arguing that "the growth in revenue far surpasses the growth in OpEx—operating spending—to support their growth in revenue"
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. The CEO emphasized that the forecast reflects data center site availability and the volatile supply constraint environment, stating, "We can ship significantly more. [The] question [on] our mind sometimes is: Are they going to be—even as we ship the chips—going to be deployed on a timely basis?"5
.Related Stories
AI Networking Revenue Doubles as Tomahawk Adoption Expands
Tan called Broadcom "the leader in AI networking" and highlighted the company's position in every generation of PCIe switching and leading-edge optical digital signal processors
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. Broadcom's AI networking revenue for the quarter more than doubled year-over-year, and Tan expects AI networking revenue to grow just as fast as XPUs over the next few years5
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Source: Market Screener
Charlie Kawwas, president of Broadcom's Semiconductor Solutions Group, described growing adoption of the vendor's Tomahawk Ultra, an Ethernet switching chip designed to connect thousands of AI accelerators and GPUs
5
. Broadcom saw customers deploy the chip in the quarter and expects scale-up application in the 2027 fiscal year5
. Tomahawk 5 customers have been upgrading to Ultra for latency improvement or to the higher-bandwidth Tomahawk 6, with customers deploying the more advanced Tomahawk products with both XPU and GPU clusters5
.Broadcom Expands Production Capacity Across Multiple Facilities
Broadcom executives detailed various ways the vendor is working to expand hardware production capacity as AI demand grows. The vendor expects to address substrate supply bottlenecks somewhat through deployment in a Singapore facility in fiscal year 2027
5
. Kawwas told analysts the vendor has already expanded capacity for its electro-absorption modulated laser, continuous wave, vertical-cavity surface-emitting laser, and indium phosphide factories this year, with expectations to increase capacity significantly over the next two years5
. This growing capacity is part of what's fueling Broadcom's growing capital expenditure as well5
. Although Broadcom doesn't supply memory to customers, the memory supply chain crisis can delay customers from deploying Broadcom products, and delays in constructing data center shells can also factor into timing5
.References
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