Broadcom Q3 AI Revenue Surges 221% to $16.7 Billion but Shares Slide on Q4 Guidance

Broadcom reported third-quarter fiscal 2026 results that topped Wall Street estimates across every major metric, driven by an extraordinary surge in artificial intelligence semiconductor demand. Revenue reached $29.59 billion, up 86% year over year and ahead of the IBES consensus of $29.36 billion, while adjusted earnings per share came in at $3.32 versus the $3.24 estimate, a 96% increase from the prior-year period. Net income nearly tripled to $13.09 billion from $4.14 billion a year earlier, and non-GAAP operating income of $20.1 billion beat the $19.73 billion estimate, representing 92% growth.

The standout figure was AI semiconductor revenue of $16.70 billion, a 221% jump from the year-ago quarter, underscoring Broadcom's deepening role as a supplier of custom AI accelerators and networking chips to hyperscale customers. The company has now built one of the largest AI chip franchises in the industry, benefiting from surging capital expenditure by major cloud providers.

Despite the beat, shares fell after the company issued fourth-quarter revenue guidance of approximately $34.8 billion, which disappointed investors who had expected a more aggressive raise. Broadcom projected Q4 AI semiconductor revenue of $21.70 billion, which would represent 236% growth year over year, and guided for non-GAAP operating income of roughly 66% of projected revenue. The market reaction mirrored a pattern seen after Broadcom's second-quarter report in June, when shares dropped sharply even as results beat estimates, suggesting investors are holding the stock to an increasingly high bar on forward guidance.