U.S. chipmaker Broadcom posted quarterly revenue that nearly doubled from a year earlier, riding a boom in artificial intelligence investment. But its fourth-quarter revenue outlook fell short of market expectations, sending shares lower in after-hours trading following the earnings release.
Broadcom's revenue for the third quarter of fiscal 2026, covering May through July, rose 86% from a year earlier to $29.591 billion, according to CNBC and other outlets on the 2nd. That topped the $29.36 billion Wall Street estimate compiled by the London Stock Exchange Group. Adjusted non-GAAP earnings per share came in at $3.32, up 96% from a year earlier and above the $3.24 consensus.
AI chips drove the improvement. Revenue at the semiconductor solutions division reached $20.839 billion, up 127% from a year earlier. Within that, AI chip revenue climbed 221% to $16.7 billion, far exceeding the $15.2 billion analysts had expected, according to StreetAccount.
Broadcom also raised its fiscal 2026 AI revenue forecast to $58 billion. It projected AI revenue of $115 billion in fiscal 2027 and $230 billion in fiscal 2028. Reuters noted that Broadcom is benefiting as AI infrastructure spending spreads beyond Nvidia's high-priced servers to custom chips and networking components.
Broadcom is seen as a leader in designing custom AI chips for big technology companies including Google, Meta and OpenAI. Anthropic and OpenAI, both moving quickly to build out AI infrastructure, have recently emerged as key customers. Chief Executive Hock Tan said the company has six customers, four of which will become extremely large, adding that supply shortages have left chip demand running ahead of what Broadcom can ship.
Still, investors said the near-term outlook disappointed. Broadcom guided to fourth-quarter revenue of $34.8 billion, below the $35.1 billion average analyst estimate compiled by Bloomberg.
