What happened
Broadcom reported Q3 2026 revenue of $29.6 billion, up 86% year-over-year, with AI semiconductor revenue jumping 221% to $16.7 billion. The company expects Q4 AI chip revenue to reach $21.7 billion.
Why it matters
Broadcom's custom AI accelerators and networking for hyperscalers are driving growth, as customers need tailored chips and faster connectivity. The company also generated $13.7 billion in free cash flow in Q3, equal to 46% of revenue.
What to watch
Broadcom's long-term outlook hinges on sustaining this AI momentum, with management anticipating AI semiconductor revenue of about $115 billion in FY2027 and $230 billion in FY2028. Watch whether its custom-silicon advantage over rival Marvell holds.
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