Quick Verdict
Broadcom reported fiscal Q3 2026 adjusted EPS of $3.32, ahead of the $3.24 consensus estimate, on revenue of $29.59 billion, also above expectations. Revenue rose 86% year over year as AI semiconductor sales surged. Shares edged higher in after-hours trading despite Q4 revenue guidance modestly below consensus.
About Broadcom Inc.
Broadcom Inc. (NASDAQ: AVGO) is a Palo Alto, California-headquartered technology company that designs and supplies semiconductor solutions and infrastructure software for complex, mission-critical enterprise and cloud workloads. Its portfolio spans custom AI accelerators, networking silicon, Ethernet switches, broadband and wireless chips, storage connectivity, and infrastructure software, including VMware-related offerings. Broadcom was incorporated in 2018 following the Avago Technologies–Broadcom combination, although its technology and operating roots extend further through predecessor businesses.
The company has become one of the most prominent beneficiaries of the AI infrastructure investment cycle, particularly through the development of custom accelerators and networking products for hyperscale and frontier-model customers. CNBC reported a market capitalization of about $1.8 trillion at the time of the release. In Q3 fiscal 2026, AI semiconductor revenue alone reached $16.7 billion, equal to roughly 56% of company-wide revenue, underlining how rapidly AI hardware has become central to Broadcom’s earnings profile.
Top Financial Highlights
- Total revenue reached $29.591 billion, increasing 86% year over year from $15.952 billion.
- GAAP net income rose to $13.088 billion, up 216% year over year from $4.140 billion.
- GAAP diluted EPS was $2.68, compared with $0.85 in the prior-year quarter.
- Non-GAAP diluted EPS was $3.32, up 96% year over year from $1.69.
- GAAP operating income increased 171% to $15.955 billion.
- Non-GAAP operating income rose 92% to a record $20.095 billion.
- Non-GAAP operating margin was approximately 67.9%, reflecting strong operating leverage despite a lower gross-margin mix from AI products.
- Consolidated non-GAAP gross margin was 75%, down 210 basis points sequentially but above the company’s 74% outlook.
- Semiconductor Solutions revenue climbed 127% to $20.839 billion, representing 70% of consolidated revenue.
- Infrastructure Software revenue increased 29% to $8.752 billion, accounting for 30% of total revenue.
- AI semiconductor revenue jumped 221% year over year and 54% sequentially to $16.7 billion.
- Operating cash flow reached $14.197 billion, up 98% year over year.
- Free cash flow totaled a record $13.665 billion, equal to 46% of revenue and up 95% from the year-earlier period.
- Cash and cash equivalents ended the quarter at $23.975 billion, versus $19.628 billion at the end of Q2 fiscal 2026.
- Broadcom paid down $5.628 billion of debt in the quarter and paid $3.103 billion in dividends.
- The board approved a quarterly cash dividend of $0.65 per share, payable September 30, 2026, to shareholders of record on September 21.
- Q4 fiscal 2026 revenue guidance is approximately $34.8 billion, implying 93% year-over-year growth.
- Q4 AI semiconductor revenue is expected to reach $21.7 billion, up 236% year over year.
- Broadcom expects Q4 non-GAAP operating income to be approximately 66% of projected revenue.
Beat or Miss?
Broadcom beat Wall Street’s reported consensus expectations for both adjusted earnings per share and revenue. However, its Q4 revenue outlook of $34.8 billion fell modestly below the $35.03 billion consensus cited by CNBC, creating a mixed near-term interpretation despite the company’s very bullish longer-term AI outlook.
| Metric | Reported | Difference/Analysis |
| Adjusted diluted EPS | $3.32 | Beat the $3.24 LSEG consensus estimate by $0.08 per share, or roughly 2.5%. |
| Revenue | $29.59 billion | Beat the $29.36 billion LSEG consensus estimate by approximately $0.23 billion. |
| AI semiconductor revenue | $16.7 billion | Up 221% YoY and 54% sequentially, serving as the principal source of quarterly growth. |
| Semiconductor Solutions revenue | $20.84 billion | Above the $15.2 billion StreetAccount estimate referenced by CNBC. |
| Infrastructure Software revenue | $8.75 billion | Slightly below the $8.82 billion StreetAccount consensus. |
| Q4 revenue outlook | $34.8 billion | Slightly below the $35.03 billion LSEG consensus forecast. |
| Q4 AI semiconductor outlook | $21.7 billion | Implies 236% YoY growth and continued acceleration in AI-related chip demand. |
Broadcom Inc.Condensed Consolidated Statements Of Cash Flows
(Source: investors.broadcom.com)
- The table presents Broadcom Inc.’s Condensed Consolidated Statements of Cash Flows, unaudited, with figures reported in USD millions. It compares cash-flow performance for the fiscal quarters ended August 2, 2026, May 3, 2026, and August 3, 2025, along with the three fiscal quarters ended August 2, 2026, and August 3, 2025.
- The statement is divided into three major cash-flow categories. Operating activities remained the largest source of cash, with net cash provided by operating activities reaching USD 14,197 million in the quarter ended August 2, 2026, compared with USD 7,166 million in the comparable 2025 quarter. For the first three fiscal quarters of 2026, operating cash flow totaled USD 32,950 million, up from USD 19,834 million in the corresponding 2025 period. Net income also increased to USD 13,088 million in the latest quarter and USD 29,747 million for the three quarters.
- Investing activities resulted in a net cash outflow of USD 1,113 million in the August 2026 quarter and USD 1,436 million during the first three quarters of fiscal 2026. These movements mainly reflected purchases of property, plant and equipment and investment-related transactions.
- Cash used in financing activities totaled USD 8,737 million in the latest quarter and USD 23,717 million for the three fiscal quarters ended August 2, 2026. Major financing outflows included payments on debt obligations, dividend payments, and share repurchases.
- Overall, Broadcom’s cash and cash equivalents increased to USD 23,975 million at the end of the August 2026 period, compared with USD 10,718 million at the end of the corresponding 2025 period. The table indicates a substantial improvement in operating cash generation, which more than offset investing and financing cash outflows.
What Leadership Is Saying
“Demand for our custom AI accelerators and networking continues to be very strong. Q3 AI semiconductor revenue of $16.7 billion grew 221% year-over-year, and 54% quarter-over-quarter. In Q4 the momentum continues, and we expect AI semiconductor revenue to accelerate to $21.7 billion, up 236% year-over-year.” — Hock Tan, President and Chief Executive Officer, Broadcom
“Broadcom achieved record revenue, operating profit and free cash flow in Q3. We delivered non-GAAP operating income growth of 92% year-over-year, as consolidated revenue grew 86% year-over-year to $29.6 billion. Q4 consolidated revenue growth is forecasted to increase 93% year-over-year to $34.8 billion, and we expect to maintain our non-GAAP operating margin at 66%, flat from a year ago.” — Amie Thuener, Chief Financial Officer, Broadcom
Management also provided unusually long-range AI revenue targets. Broadcom expects fiscal 2026 AI semiconductor revenue of $58 billion, followed by approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028. These targets depend on continued customer demand and on execution across data-center construction, power availability, leading-edge wafer capacity, substrates, HBM memory, packaging, and other supply-chain inputs.
Historical Performance
| Category | Q3 Fiscal 2026 | Q3 Fiscal 2025 | Change (%) |
| Revenue | $29.591 billion | $15.952 billion | 86% |
| GAAP net income | $13.088 billion | $4.140 billion | 216% |
| GAAP operating income | $15.955 billion | $5.887 billion | 171% |
| GAAP operating expenses | $4.501 billion | $4.816 billion | −7% |
| Operating cash flow | $14.197 billion | $7.166 billion | 98% |
| Free cash flow | $13.665 billion | $7.024 billion | 95% |
| Semiconductor Solutions revenue | $20.839 billion | $9.166 billion | 127% |
| Infrastructure Software revenue | $8.752 billion | $6.786 billion | 29% |
Note: Broadcom’s GAAP operating expenses declined even as revenue expanded sharply because revenue growth substantially outpaced R&D, SG&A, acquisition-related amortization, and restructuring expenses.
Competitor Comparison
A strict Q3 fiscal 2026 vs. Q3 fiscal 2025 comparison cannot be made across peers using a single standardized reporting window because major AI semiconductor competitors use different fiscal calendars and had not necessarily reported comparable quarters by September 2, 2026. The following table therefore uses Broadcom’s official Q3 results and identifies relevant competitive context rather than presenting mismatched quarter-on-quarter figures as directly comparable.
| Category | Broadcom Q3 Fiscal 2026 | Competitive Context | Analysis |
| AI semiconductor revenue | $16.7 billion | NVIDIA remains the major GPU-focused AI infrastructure competitor, while Marvell competes in custom silicon, networking, and data-center connectivity | Broadcom’s AI revenue was up 221% YoY, indicating fast expansion in custom accelerators and networking. |
| Semiconductor segment revenue | $20.839 billion | Marvell reported 37% revenue growth in its latest reported Q2 results | Broadcom’s semiconductor segment grew 127% YoY, materially faster than Marvell’s cited growth rate, although reporting periods and accounting bases differ. |
| Non-GAAP operating margin | 67.90% | NVIDIA’s operating margin was cited at 66%; Marvell’s non-GAAP operating margin at 36% | Broadcom’s operating leverage has produced a margin profile comparable with NVIDIA’s cited level and substantially above Marvell’s cited level. Periods are not identical. |
| Infrastructure software revenue | $8.752 billion | Differentiates Broadcom from pure-play semiconductor peers | VMware-related infrastructure software provides Broadcom with a large, high-margin revenue stream not directly replicated by many chip competitors. |
| Long-term AI outlook | $115 billion FY2027; $230 billion FY2028 | Depends on custom XPU deployments for Google, Anthropic, OpenAI, and Meta | The outlook signals Broadcom’s strategic focus on customized AI accelerators, Ethernet switching, optical interconnects, and broader AI networking rather than merchant GPUs alone. |
How the Market Reacted?
Broadcom shares edged higher in extended trading after the release, as investors balanced the company’s earnings and revenue beat with Q4 revenue guidance that came in slightly below the consensus forecast. The immediate market reaction was restrained rather than euphoric, suggesting that investors had already priced in a substantial degree of AI-led growth.
The larger issue for investors appears to be execution against Broadcom’s ambitious AI roadmap. Management projected that AI semiconductor revenue could rise from $58 billion in fiscal 2026 to approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028, but the company acknowledged constraints involving data-center sites, power, memory, substrates, packaging, and chip supply. Broadcom’s report is therefore fundamentally bullish on the AI cycle, while its near-term outlook indicates that supply-chain capacity and deployment timing will remain key variables.
