Broadcom Reports Strong Q3 Earnings with AI Chip Sales Tripling
Broadcom Inc. (NASDAQ:AVGO) reported record results in its third-quarter earnings, posting revenue of $29.59 billion and adjusted EPS of $3.32 — both up significantly year-over-year. The company's AI chip sales surged by more than triple to $16.7 billion during the quarter, driven largely by demand for custom accelerators used in data centers. Broadcom expects this segment to grow further into Q4 2026 with revenue projected at $21.7 billion. Despite strong performance across multiple business lines — including a 127% increase in semiconductor sales and a 29% rise in infrastructure software revenue — the company’s forward guidance for Q4 came up slightly short of Wall Street expectations, setting it at $34.8 billion versus an expected $35.03 billion. While this gap is relatively small, investors are highly sensitive to any deviation from high-growth forecasts due to Broadcom's premium valuation and its role as a key player in the AI chip market. The company generated robust free cash flow of $13.7 billion during Q3 2026 while maintaining low capital expenditures. However, concerns remain about long-term sustainability given the difficulty of sustaining such high growth rates at scale.
Topics: AI chips earnings report revenue growth semiconductors