There is a peculiar moment unfolding in the AI trade right now, and Broadcom’s latest earnings report captures it in sharp relief. The chipmaker delivered a quarter that blew past consensus estimates across the board, extended its streak of beats to nine consecutive quarters, and then watched its stock stumble anyway. The culprit was not the present, but the near-term future: management’s fourth-quarter revenue projection of roughly $34.8 billion came in just shy of the $35.03 billion analysts had penciled in.
That gap of a few hundred million dollars—less than one percent of expected sales—proved enough to overshadow an otherwise spectacular print. For the fiscal third quarter of 2026, Broadcom reported revenue of $29.59 billion, up 86 percent year over year, while adjusted earnings per share landed at $3.32 against forecasts near $3.24. The engine behind those numbers was unmistakable: AI semiconductor revenue surged 221 percent to $16.7 billion, comfortably ahead of the $15.2 billion consensus.
The Long-Range Numbers That Dwarf the Quarter
Where the report gets genuinely interesting, though, is not in the quarterly scorecard but in the multi-year roadmap management unfurled alongside it. Broadcom now expects AI chip revenue to reach roughly $115 billion in fiscal 2027—up from a prior target of over $100 billion—and then nearly double again to approximately $230 billion in fiscal 2028. Those are staggering figures for a company whose total revenue only recently crossed the $50 billion annual threshold.
CEO Hock Tan anchored those projections in unusually specific customer commitments. Google is expected to purchase processors worth tens of billions of dollars annually over a multi-year horizon. Anthropic, meanwhile, is slated to deploy five gigawatts of TPU-8i chips in 2027, with the potential for another ten gigawatts beyond that. Tan went further, stating that Anthropic would become Broadcom’s largest customer for custom AI chips in fiscal 2027 and retain that position through 2028.
The OpenAI collaboration is also expanding. The jointly developed “Jalapeno” chip is projected to reach 1.3 gigawatts of deployment in 2027, with the first and second generations together potentially exceeding five gigawatts. Meta continues to push its MTIA accelerator for inference workloads, and Apple has indicated plans to route more U.S.-based manufacturing through Broadcom.
These commitments collectively recast Broadcom’s identity. No longer merely a semiconductor supplier, the company is positioning itself as a structural bet on the entire AI infrastructure buildout—a role that carries both extraordinary upside and, as the market’s reaction suggests, considerable scrutiny.
Should investors sell immediately? Or is it worth buying Broadcom?
When Bigger Numbers Breed Bigger Doubts
The tension at the heart of Broadcom’s current situation is almost paradoxical: the more audacious the long-term guidance becomes, the more investors seem to question whether such promises can actually be kept. That skepticism has weighed on the share price with unusual persistence.
The stock closed Friday at €308.50, having lost roughly 15 percent over the past 30 days. That puts the shares about 7.5 percent below their 50-day moving average of €333.60 and a striking 28 percent off the 52-week high of €429.60. The slide accelerated after Broadcom disclosed plans roughly a week ago to raise billions in debt to finance its AI infrastructure expansion—the stock has shed another 3.0 percent since that announcement.
The market’s mood stands in stark contrast to the analyst community’s response. Macquarie upgraded the stock to “Outperform” and lifted its price target 12 percent to $490, arguing that the risk of Google bringing chip production in-house is now largely priced in and that Broadcom represents the cleanest way to gain exposure to Anthropic’s compute buildout. Cantor Fitzgerald was more aggressive still, raising its target to $600 with an “Overweight” rating. Even the more cautious voices remained constructive: Truist Financial trimmed its target modestly to $520 but held its buy recommendation.
A Solid Foundation, A Pivotal Question
Underneath the market drama, Broadcom’s financial footing remains sturdy. The board confirmed a quarterly dividend of $0.65 per share, payable September 30, 2026, to shareholders of record as of September 21. Free cash flow for the third quarter came in at $13.66 billion—a healthy 46 percent of revenue—providing ample cover for both the dividend and the company’s ambitious capital plans.
The next earnings report is scheduled for December 10, which will offer investors their first read on whether the fourth-quarter guidance gap was a one-off or the beginning of a slower growth cadence. For now, Broadcom finds itself in an unusual position for a company executing this well: it must convince the market that its near-term caution is not a crack in the foundation, even as it asks investors to place enormous faith in a 2028 vision that remains, for all its specificity, years away from delivery.
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