AI chip revenue more than tripled to $16.7 billion in Q3 2026 <\/p>\n
The incredible growth — unsurprisingly — came primarily from Broadcom’s AI business. Revenue from AI chips reached $16.7 billion, up 221% year over year and 54% from the previous quarter. Broadcom expects that figure to climb again to $21.7 billion in the fourth quarter, which would clock in at 236% year-over-year growth. <\/p>\n
Growth was not limited to AI, however. Total semi sales grew 127% to $20.8 billion, while infrastructure software revenue rose 29% to $8.8 billion. The company brought in $14.2 billion in operating cash flow while spending just over $500 million on capital expenditures (capex). That left $13.7 billion in free cash flow (FCF). <\/p>\n
Broadcom’s $34.8 billion Q4 guidance fell short of the $35.03 billion Wall Street expected <\/p>\n
According to data from LSEG, analysts had expected Broadcom to forecast $35.03 billion in Q4 sales. It fell short of that mark, setting forward guidance of $34.8 billion. Now, that’s not a huge gap by any means. A few hundred million is small potatoes at this scale. But expectations are sky-high right now for any company in Broadcom’s position. <\/p>\n
The company makes custom AI accelerators — chips built around a customer’s particular workload — and sells important AI networking equipment. That’s made it one of the biggest beneficiaries of the AI data-center boom<\/a> aside from Nvidia. Investors have come to expect earnings beats as the bare minimum and are extremely sensitive to forward guidance, wary of any signs that the AI train is slowing. <\/p>\n That means Broadcom can grow fourth-quarter revenue by a projected 93% and still disappoint if investors were already counting on something slightly better. And as the numbers get larger, maintaining today’s growth rates becomes much harder even if demand remains healthy. And if demand weakens even a little, a stock trading with a price to earnings (P\/E) ratio above 60 will take a real hit. <\/p>\n Story Continues <\/p>\n Right now, that doesn’t look like a threat in the near term. Broadcom has an agreement to supply Alphabet’s Google with custom AI processors through 2031. But the tech giant just struck a custom-chip deal with Marvell Technology last month. At this point, it’s not really cause for concern, but it’s something to watch. It shows that large customers don’t want to depend entirely on one supplier. And over time, they may want to bring more of the work in-house. <\/p>\n A sub-1% guidance miss is still enough to spook investors looking for perfection <\/p>\n This was obviously an exceptional quarter, and I don’t mean to imply a guidance miss of less than 1% undoes that. I’m just pointing out that at this point the market expects exceptional. <\/p>\n And now, as you look to the next round of earnings, I would pay close attention to margins. Can Broadcom<\/a> maintain its pricing power as it grows? <\/p>\n Should you buy stock in Broadcom right now? <\/p>\n Before you buy stock in\u00a0Broadcom, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Broadcom\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $435,803!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,334,577!* <\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by nearly 5x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of September 2, 2026. <\/p>\n Johnny Rice<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Broadcom, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> <\/p>\n