Broadcom (AVGO) Earnings Date & Reports

Key Takeaways

• Revenue reached $29.6 billion, up 86% year over year, narrowly beating analyst estimates.
• Non-GAAP earnings per share (EPS, profit divided by shares outstanding) came in at $3.32, up 96% and above the $3.24 consensus.
• AI semiconductor revenue surged 221% to $16.7 billion, now representing 56% of total revenue.
• Fourth-quarter revenue guidance of roughly $34.8 billion landed just below the $35.03 billion Wall Street expected, pressuring shares after hours.
• Broadcom raised its fiscal 2026 AI revenue outlook to $58 billion and set long-term AI targets of $115 billion (fiscal 2027) and $230 billion (fiscal 2028).

Earnings Context and Why It Matters

Broadcom has become one of the clearest beneficiaries of the artificial intelligence data-center boom, supplying custom AI accelerators and high-speed networking to a concentrated group of hyperscale customers. Its fiscal third quarter of 2026 was expected to show whether that momentum could keep accelerating against increasingly demanding expectations. With AI now driving more than half of total revenue, this report served as a key read on the durability of AI infrastructure spending, the pace of custom chip (XPU) adoption, and whether Broadcom could keep converting explosive revenue growth into record profitability and free cash flow.

Reported Results

Broadcom reported revenue of $29.59 billion for its fiscal third quarter of 2026, up 86% year over year and slightly above the roughly $29.4 billion consensus estimate. Non-GAAP diluted EPS reached $3.32, up 96% from a year earlier and ahead of the $3.24 analysts had projected. GAAP (Generally Accepted Accounting Principles) net income climbed 216% to about $13.1 billion.

AI semiconductor revenue hit $16.7 billion, up 221% year over year and 54% sequentially. Semiconductor Solutions revenue surged 127% to a record $20.84 billion, while Infrastructure Software revenue rose 29% to $8.75 billion. Non-GAAP operating income grew 92% to $20.1 billion, with operating margin expanding to 67.9%. Free cash flow reached a record $13.7 billion, equal to 46% of revenue.

The company raised its fiscal 2026 AI revenue outlook to $58 billion and guided fourth-quarter revenue to approximately $34.8 billion. That figure represented 93% year-over-year growth but came in modestly below the $35.03 billion consensus, a small shortfall that still weighed on sentiment.

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Market Reaction and Investor Sentiment

Despite beating on both the top and bottom lines, Broadcom shares slid roughly 5% to 6% in extended trading following the September 2, 2026 release. The decline reflected how high expectations had become: a sub-1% gap between the company's fourth-quarter guidance and consensus was enough to trigger selling. Investor sentiment remains broadly positive on the AI growth story, but the post-earnings move underscored the market's sensitivity to any sign that forward momentum might fall short of aggressive projections, particularly at an elevated valuation.

Forward Outlook and Key Factors to Monitor

Broadcom's long-term AI revenue roadmap is now the central focus. Management raised its fiscal 2026 AI outlook to $58 billion, up 186% year over year, and said it has secured supply to support roughly $115 billion of AI semiconductor revenue in fiscal 2027 and about $230 billion in fiscal 2028. The company expects production shipments of Meta's custom MTIA accelerator in the fourth quarter, alongside continued volume ramp for Google and Anthropic accelerators.

Investors will want to watch several factors in the coming quarters. First, margin trends: management guided fourth-quarter non-GAAP operating margin to about 66%, down from 67.9%, as a shift toward custom accelerators with higher memory content dilutes gross margin. Second, supply constraints remain a key variable, including data-center readiness, leading-edge wafer availability, substrates, and high-bandwidth memory (HBM), all of which could influence the pace at which demand translates into revenue.

Finally, customer concentration risk is worth monitoring, since much of the AI growth is tied to a small group of large customers. Broadcom's ability to sustain its software growth and manage balance-sheet leverage while funding dividends and debt reduction will also shape the investment case as the AI build-out matures.

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