AVGO Q3 2026 Earnings Review
Broadcom Inc. (AVGO Sep 04, 2026, close, $357.90)
Broadcom (AVGO) late Wednesday reported fiscal third-quarter results that surpassed Wall Street’s expectations and provided stronger-than-anticipated guidance for the current quarter, with the fabless chipmaker and infrastructure software provider posting adjusted earnings of $3.32 per share on revenue of $29.59 billion for the quarter ended Aug. 2, compared with analysts’ estimates of $3.22 per share in earnings and $29.24 billion in sales; year over year, earnings jumped 96% and revenue rose 86%.
The company recorded its fifth consecutive quarter of accelerating sales growth.
Key Takeaways
Broadcom reported record quarterly revenue, operating income, and free cash flow.
AI semiconductor revenue surged 221% year over year to $16.7 billion.
Management said demand for custom AI chips remains higher than available supply.
The company forecasts fiscal fourth-quarter revenue of $34.8 billion.
Broadcom expects AI semiconductor revenue to reach $115 billion in fiscal 2027.
Business Performance of AVGO
Record revenue: Broadcom’s fiscal third-quarter revenue reached $29.6 billion, highlighting strong overall growth.
Higher profitability: Operating income rose to $20.1 billion, while the operating margin expanded to 67.9%.
Strong EPS growth: Non-GAAP earnings per share increased 96% year over year to $3.32.
Semiconductor-led expansion: Semiconductor solutions revenue jumped 127% to $20.8 billion.
AI as the primary driver: Growth was led by rising demand for AI chips, custom accelerators, and networking equipment.
Infrastructure software growth: Revenue from infrastructure software increased 29% to $8.8 billion, supported by VMware-related products and enterprise demand.
Concentrated AI demand: Broadcom’s six XPU customers are generating a sizable portion of demand for its AI-related products.
Industry-wide trend: Results reflect major technology companies’ increasing investment in custom AI infrastructure and compute capacity.
Financial Highlights of Broadcom (AVGO)
Revenue: $29.6 billion, representing an 86% year-over-year increase.
Non-GAAP EPS: $3.32, up 96% from the same period last year.
Operating income: $20.1 billion, an increase of 92% year over year.
Operating margin: Expanded to 67.9%, up 240 basis points year over year.
Gross margin: 75%, down 210 basis points sequentially but above the 74% forecast.
Free cash flow: Reached $13.7 billion, equivalent to 46% of revenue.
Semiconductor solutions revenue: Climbed 127% year over year to $20.8 billion.
AI semiconductor revenue: Surged 221% to $16.7 billion year over year.
Infrastructure software revenue: Increased 29% year over year to $8.8 billion.
Cash and equivalents: Totaled $24 billion, up $4.3 billion from the previous quarter.
Outlook & Guidance
Q4 revenue forecast: $34.8 billion, slightly above Wall Street’s $34.68 billion consensus estimate.
Expected growth: 93% year over year, compared with $18.02 billion in sales in the prior-year quarter.
AI demand: Strong demand continues for custom AI processors and data-center networking chips.
Key customers: Google, Meta, Anthropic, and OpenAI.
Q4 AI semiconductor outlook: $21.7 billion, representing 236% year-over-year growth.
The company continues to benefit from strong demand for custom AI processors and data-center networking chips from customers including Google, Meta, Anthropic, and OpenAI. CEO Hock Tan said third-quarter AI semiconductor revenue rose 221% year over year to $16.7 billion, up 54% sequentially, and projected fourth-quarter AI semiconductor revenue of $21.7 billion, representing 236% year-over-year growth.
Analysts Expectation Post AVGO Q3 Earnings
DA Davidson reduced its price target for Broadcom Limited (AVGO) from $400 to $350 while maintaining a Neutral rating.
BMO Capital raised its price target for Broadcom Limited (AVGO) to $575 from $455 while maintaining an Outperform rating.
Truist Securities lowered its price target for Broadcom Limited (NASDAQ: AVGO) to $520 from $550 while maintaining a Buy rating.
SHARIAH Compliance Metrics
AVGO is “HALAL” based on AAOIFI methodology as of Q6 2026 report.
Business Activity 99.42% Halal, Doubtful is 0.00%, and non-Halal is 0.58%.
Interest-bearing securities and assets = 2.00% (Shariah-complaint is < 30%).
Interest-bearing debt = 6.60% (Shariah-complaint is < 30%).
You can get a more detailed breakdown of AVGO Shariah status on its stock page.