Broadcom's AI Revenue Jumps 221% to $16.7 Billion

Broadcom reported artificial intelligence semiconductor revenue of $16.7 billion for its fiscal third quarter, marking a 221 percent increase over the prior year. The company stated that demand for its custom accelerators and networking hardware remains robust, with management forecasting that AI revenue will accelerate to $21.7 billion in the fourth quarter, representing a year-over-year growth rate of 236 percent.

Despite these figures, the stock's market reaction was muted, closing at $368.56 on September 8, 2026. A $1,000 investment made on the same date one year earlier is now valued at approximately $1,070 including dividends. The modest price appreciation reflects investor caution regarding the fourth-quarter total revenue guidance of $34.8 billion, which fell slightly below some market expectations, alongside margin pressures from rising memory costs.

Strategic Partnerships Drive Growth

Broadcom's financial performance is heavily anchored in its role as a design partner for major technology firms. The company is developing Tensor Processing Units for Google, including the Ironwood version 7 slated for delivery to Anthropic in the fourth quarter. It is also designing custom inference chips for OpenAI and Meta Platforms, relationships that management says are central to its current revenue momentum.

CEO Hock Tan indicated that Broadcom plans to deliver tens of billions of dollars in TPU revenue annually from Google alone over the next several years. This concentration in a few large customers underpins the company's forecast, although it also creates dependency on the continued capital expenditure of these hyperscalers.

Long Term Revenue Outlook

Broadcom has outlined an ambitious multi-year trajectory, projecting AI chip revenue to reach $58 billion in fiscal 2026, $115 billion in fiscal 2027, and $230 billion in fiscal 2028. This long-term target implies approximately $30 in earnings per share for fiscal 2028, a figure that aligns with current Wall Street consensus estimates. The company currently trades at roughly 12 times this forward earnings target, a valuation significantly lower than the 25 times multiple seen in leading chip peers.

Supply Chain and Regulatory Risks

Management asserts that demand currently exceeds the outlined outlook and that sufficient supply has been secured to meet forward-looking requirements. However, component shortages, particularly in memory, remain a potential constraint on margin and volume. Additionally, regulatory scrutiny regarding data center construction and utility impacts could pose a headwind to the infrastructure spending that drives Broadcom's business model, as noted by observers in the GN auto stocks and technology sector.