Broadcom and Micron Raise AI Chip Guidance as Demand Surges

Broadcom and Micron Technology have delivered strong quarterly results, attributing substantial revenue growth to accelerating demand for AI infrastructure components. Both companies reported figures that exceeded market expectations, signaling that hyperscaler spending on custom silicon and high-bandwidth memory remains robust despite recent market volatility.

According to data compiled by GN stocks/chips, these two semiconductor leaders have raised their forward guidance, indicating a sustained upward trajectory in AI-related sales. The results suggest that the supply chain for data center hardware is operating at high capacity, with specific long-term contracts locking in future revenue streams for both manufacturers.

Broadcom’s Custom Silicon Revenue Expands

Broadcom reported fiscal Q3 2026 revenue of $29.59 billion, an 85.5% increase year over year, with non-GAAP earnings per share of $3.32. AI semiconductor revenue accounted for $16.7 billion, representing 56% of total sales, a significant shift from the previous quarter's 49%. The company guided fiscal Q4 AI revenue to $21.7 billion, projecting a multi-year path that reaches approximately $115 billion in fiscal 2027 and $230 billion in fiscal 2028.

This growth is anchored by long-term agreements with six named customers, including a multi-year deal for Google TPUs and a planned 1.3 gigawatt deployment for OpenAI in 2027. However, the rising share of custom accelerators is impacting margins, with consolidated gross margin expected to drop to approximately 73% in Q4 from 78% a year ago due to higher memory content in these chips.

Micron’s Memory Cycle Drives Capex

Micron Technology posted fiscal Q3 2026 revenue of $41.46 billion, a 345.7% year-over-year increase, with non-GAAP EPS of $25.11. Data-center revenue exceeded $25 billion, translating to an annualized run rate of over $100 billion. Management guided fiscal Q4 revenue to $50.0 billion with a gross margin near 86%, and outlined full-year fiscal 2026 capital spending of approximately $27 billion.

The company has shipped over $1 billion in HBM4 revenue, with the HBM4 12-high ramping twice as fast as the previous generation. Micron has secured 16 strategic customer agreements, many of which are five-year take-or-pay contracts covering roughly 20% of DRAM and a third of NAND volume. CEO Sanjay Mehrotra noted that AI has elevated the value of memory, expecting industry tightness to persist beyond calendar 2027.

Market Valuation and Risk Factors

Broadcom shares are down 1.61% year to date at $339.27, with a market cap near $1.62 trillion. Micron shares are up 225.21% year to date at $927.60. While both companies benefit from strong AI demand, investors face distinct risks: Broadcom’s margin compression from higher memory content in custom chips and Micron’s intense capital expenditure, which could pressure returns if AI infrastructure spending softens.