What happened
Broadcom reported fiscal Q3 2026 revenue of $29.59B, up 85.5% year over year, with AI semiconductor revenue of $16.70B, up 221% YoY. Management guided Q4 AI chip revenue to roughly $21.7B.
Why it matters
This marks accelerating growth—AI revenue was up 54% sequentially and is projected to reach $230 billion in fiscal 2028. Broadcom's custom chips, like TPUs for Google and MTIA for Meta, are replacing Nvidia GPUs for some workloads.
What to watch
Watch whether Broadcom can sustain this momentum as it executes on contracts for Anthropic, OpenAI, and others through 2027-2028. The company says it's on target to exceed $30 in earnings per share in fiscal 2028.
WHO IT HITSHyperscaler and AI lab procurement teams—such as those at Alphabet, Meta, OpenAI, and Anthropic—now have a credible alternative to Nvidia GPUs. Broadcom's rise could shift their infrastructure investment decisions, potentially lowering costs for custom AI accelerators.
Summaries like this, every morning.
Broadcom has emerged as a key supplier of custom AI accelerators, challenging Nvidia's dominance. The company's chips, co-developed with hyperscalers, promise better performance at lower cost for specific AI workloads, as highlighted by Hock Tan's remarks.
The deployment roadmap shows deepening ties: Google will use TPUs worth multi-tens of billions annually, Anthropic will deploy 1GW of Ironwood in 2026 and 5GW of TPU v8i in 2027, and OpenAI will use 1.3GW of Jalapeno in 2027, expanding to over 5GW in 2028.
Broadcom's growth is underpinned by customer demand exceeding its outlook, with supply secured. However, concentration risk remains—six customers, four expected to be large, mean any pullback could hurt. The company's success hinges on sustaining these long-term contracts and managing the risk of reliance on a few key buyers.
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