Broadcom shares rose about 2% in extended trading on Wednesday after the chipmaker delivered a bullish forecast for the coming fiscal year and signaled expanding business with leading artificial intelligence labs, according to CNBC.
The company reported fiscal third-quarter results that showed revenue surging 86% year over year to $15.95 billion, up from $15.95 billion a year earlier, per the company’s statement. Net income more than tripled to $13.09 billion, or $2.68 per share, from $4.14 billion, or 85 cents per share, in the year-ago quarter.
For the fiscal fourth quarter, Broadcom guided to revenue of $34.8 billion, slightly below the $35.03 billion analysts had expected, according to LSEG consensus estimates.
AI momentum accelerates
Broadcom has emerged as one of the biggest beneficiaries of the AI infrastructure boom, designing custom chips for major tech players such as Google, Meta, and OpenAI. The stock has climbed more than sixfold since the end of 2022—coinciding with the rise of ChatGPT and other generative AI services—lifting the company’s market capitalization to roughly $1.8 trillion.
However, shares have underperformed the broader market in 2026. As of Wednesday’s close, Broadcom stock had gained about 6% for the year, while the S&P 500 was up 12% over the same stretch.
During the quarter, Broadcom highlighted its custom Jalapeno chip developed with OpenAI and noted that Apple said it would increase spending with Broadcom for U.S. chip production.
CEOs bullish on AI processor demand
CEO Hock Tan told analysts on a conference call that Broadcom is accelerating shipments of Google Ironwood tensor processing units (TPUs) to Anthropic and TPU 8i chips to Google. He said the company expects to deliver tens of billions of dollars of processors to Google annually for the next several years.
“Shipments of Jalapeno for OpenAI will continue, and for Meta, we expect production shipments of their custom MTIA accelerator optimized for inference and recommendation at scale,” Tan said.
Tan outlined a significant ramp in AI infrastructure, projecting that Anthropic could deploy 5 gigawatts of TPU 8i chips in 2027, with line of sight to an additional 10 gigawatts. He also said OpenAI is preparing to tape out its second-generation chip and is already planning a third version with Broadcom.
For Jalapeno, Broadcom is looking at a 1.3 gigawatt deployment in 2027, with potential to exceed 5 gigawatts once second-generation chips are included, Tan added.
Aggressive fiscal 2027 targets
For fiscal 2027, Tan said Broadcom aims to double AI-related revenue to $115 billion, with plans to double again to $230 billion in fiscal 2028. He also said the company is on track to deliver over $30 in earnings per share. That compares with the LSEG consensus of $25.86 for fiscal 2028 adjusted EPS.
Broadcom’s finance chief, Amie Thuener, said the company is “empowering two of our most strategic customers, the leading AI labs, to bridge the gap between their current cash flow and the significant upfront investments required for their businesses.” She noted Broadcom may provide residual value guarantees, which could become contingent liabilities for the labs.
“It makes economic sense for Broadcom to invest and enable these guys,” Tan said.
In the latest quarter, semiconductor revenue more than tripled to $16.7 billion, surpassing the $15.2 billion average estimate, according to StreetAccount. Infrastructure software revenue came in at $8.75 billion, slightly missing the $8.82 billion consensus.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/02/broadcom-avgo-q3-earnings-report-2026.html
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