Broadcom shares fall after chipmaker issues weak fourth-quarter revenue outlook
Broadcom shares fall 5% in extended trading after the chipmaker projects current-quarter revenue below Wall Street expectations. The guidance overshadows third-quarter results that top consensus estimates and show strong year-over-year growth in both revenue and profit.
Highlights
- Broadcom forecasts fiscal fourth-quarter revenue of $34.8 billion, missing analyst expectations of $35.03 billion per LSEG data.
- Third-quarter adjusted EPS reaches $3.32 on revenue of $29.59 billion, surpassing consensus estimates of $3.24 EPS and $29.36 billion revenue.
- Semiconductor revenue more than triples to $16.7 billion, exceeding the $15.2 billion estimate, while infrastructure software revenue hits $8.75 billion, just under the $8.82 billion consensus.
Quarterly results and revenue outlook
As reported by CNBC, Broadcom says it expects fiscal fourth-quarter revenue of $34.8 billion, below the $35.03 billion analysts expect, based on LSEG data.For the third quarter, the company reports adjusted earnings per share of $3.32, ahead of the $3.24 consensus estimate. Revenue reaches $29.59 billion, also above expectations of $29.36 billion.
Broadcom says revenue rises 86% from $15.95 billion a year earlier. Net income more than triples to $13.09 billion, or $2.68 per share, from $4.14 billion, or 85 cents per share, a year earlier.
AI demand supports growth despite stock lag
The company remains one of the biggest beneficiaries of the artificial intelligence boom, supplying custom chips to customers including Google, Meta and OpenAI. Its stock has climbed more than sixfold since the end of 2022, alongside the rise of ChatGPT and other generative AI services, lifting Broadcom's market value to about $1.8 trillion.Even so, the shares trail broader market gains this year. As of Wednesday's close, Broadcom stock is up about 6% in 2026, compared with a 12% gain for the S&P 500 over the same period.
During the quarter, Broadcom highlights the custom Jalapeno chip developed with OpenAI, while Apple says it will increase spending with Broadcom for U.S. chip production. Semiconductor revenue more than triples to $16.7 billion, above the $15.2 billion average estimate from StreetAccount, while infrastructure software revenue totals $8.75 billion, slightly below the $8.82 billion analyst consensus tracked by StreetAccount.
Our earlier article covered how investors were positioning ahead of Broadcom’s earnings, looking for signs the company might raise its AI semiconductor revenue guidance after a prior sell-off. It also noted that strong results from AI infrastructure players helped support sentiment around ongoing AI spending, even as broader market risks and uncertainty around key customer dynamics remained in focus.
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