Broadcom (AVGO) Earnings Date & Reports

Key Takeaways

• Broadcom reported record third-quarter fiscal 2026 revenue of $29.59 billion, up 86% year over year, narrowly ahead of the roughly $29.2 billion consensus estimate.
• Non-GAAP (adjusted) earnings per share came in at $3.32, up 96% from a year earlier and above the approximately $3.22 analysts expected.
• AI semiconductor revenue surged 221% year over year to $16.7 billion, driven by custom AI accelerators and networking demand.
• Fourth-quarter revenue guidance of about $34.8 billion fell short of the roughly $35 billion consensus, pressuring shares after hours.
• Management raised its longer-term outlook, now expecting AI chip revenue of about $115 billion for fiscal 2027 and roughly $230 billion in revenue by fiscal 2028.

Earnings Context and Why It Matters

Broadcom has become one of the clearest beneficiaries of the artificial intelligence infrastructure buildout, supplying custom AI accelerators and networking silicon to several of the world's largest technology companies. Because AI-related sales now dominate its growth, each quarterly report serves as a real-time read on hyperscaler spending and the durability of the AI investment cycle. The fiscal third quarter was expected to show a sharp acceleration from prior periods, making the report an important test of whether Broadcom's AI momentum could keep pace with an increasingly optimistic market. The results also carry broader implications for the semiconductor industry and for investor confidence in AI-driven earnings growth.

Reported Results

For the third quarter of fiscal 2026, which ended August 2, Broadcom posted net revenue of $29.59 billion, an 86% increase from $15.95 billion in the prior-year period and slightly above the consensus estimate of about $29.2 billion. Non-GAAP diluted earnings per share (EPS) reached $3.32, up 96% year over year and ahead of the roughly $3.22 analysts had projected. On a GAAP (Generally Accepted Accounting Principles) basis, net income was $13.09 billion, with diluted EPS of $2.68, compared with $0.85 a year earlier.

Segment results highlighted the shift in the company's mix. Semiconductor Solutions revenue rose 127% to $20.84 billion, while Infrastructure Software revenue grew 29% to $8.75 billion. Within semiconductors, AI revenue climbed 221% year over year to $16.7 billion. Operating cash flow reached $14.2 billion, up 98%, and free cash flow (cash from operations minus capital expenditures) was $13.67 billion. The company also declared a quarterly dividend of $0.65 per share.

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Market Reaction and Investor Sentiment

Despite beating on both revenue and adjusted EPS, Broadcom shares initially dropped more than 6% in after-hours trading, with the decline later narrowing. The selloff reflected a classic "sell the news" dynamic: investors had bid the stock up in anticipation of a blowout quarter, and the fourth-quarter revenue guide of approximately $34.8 billion landed below the roughly $35 billion Wall Street had modeled. The strong top-line growth and record results were not enough to satisfy an already-elevated bar, underscoring how high expectations had become heading into the print. Sentiment remains broadly positive on the company's AI pipeline, but the guidance shortfall tempered immediate enthusiasm.

Forward Outlook and Key Factors to Monitor

Broadcom guided to fourth-quarter fiscal 2026 revenue of approximately $34.8 billion, which would represent roughly 93% year-over-year growth. Within that, management expects AI semiconductor revenue to accelerate to about $21.7 billion, up 236% year over year, while non-GAAP operating margin is projected at around 66% of revenue. Investors will be watching whether the company can deliver on that margin target as the AI mix grows and as it scales production for large custom accelerator programs.

Longer term, management raised its AI revenue outlook for the fiscal year ending October 2027 to about $115 billion, up from a prior forecast of more than $100 billion, and indicated revenue could roughly double to around $230 billion by fiscal 2028. Key factors to monitor include the pace of customer deployments across custom AI chips, the balance between AI and non-AI semiconductor demand, and software segment growth. Cost trends, margin sustainability, and the ability to convert strong bookings into shipped revenue will also be central to the stock's next move.

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