Broadcom AI Revenue Surges 221% as Yields Near 5%

EarningsAnalystCorporate Action Impact 5
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Summary · why it matters

Broadcom's AI semiconductor revenue surged to $16.7 billion in its fiscal third quarter, up 221% year over year, with management guiding to $58 billion for fiscal 2026 and $230 billion by fiscal 2028. The company's Jalapeno chip, OpenAI's first-generation custom accelerator built by Broadcom, runs frontier AI workloads at half the cost of a GPU, a cost advantage that management argues makes it indispensable to hyperscalers as borrowing costs climb. Broadcom reported total Q3 revenue of $29.59 billion, up 85.5% year over year, with free cash flow of $13.67 billion, equal to 46% of revenue, and guided Q4 AI revenue to $21.7 billion, up 236% year over year. Chief Executive Hock Tan said on the call the company is on target to exceed $30 in earnings per share in fiscal 2028, nearly five times the fiscal 2025 figure of $6.82, while the dividend was raised 10% in December 2025, the fifteenth consecutive annual increase since fiscal 2011. The company carries $23.98 billion in cash against $59.6 billion of gross fixed-rate debt at a 4% weighted coupon, and repurchased $7.8 billion of stock in the first quarter of fiscal 2026 under a $10 billion authorization approved in March 2026, though customer concentration among Google, Anthropic, OpenAI, and Meta remains a risk.

Impact on stocks 3

Artificial Intelligence▲ · 3 stocks
Broadcom Inc
AVGO
▲ PositiveCapitalDemandrelevance

Broadcom's Q3 AI revenue surged 221% to $16.7B with strong guidance, FCF, dividend hike, and buybacks.

Theme Impact 5

Off-coverage companies 2

OpenAIPrivate± Mixed
Demandrelevance

OpenAI's first-generation custom accelerator built by Broadcom is mentioned, but no new OpenAI-specific development.

AnthropicPrivate± Mixed
relevance

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