Highlights

  • Broadcom reported Q3 FY2026 revenue of $29.6 billion, up 86% year over year, with AI semiconductor revenue of $16.7 billion growing 221% as hyperscale customers accelerated custom AI chip deployments.
  • Non-GAAP diluted EPS of $3.32 grew 96% year over year, reflecting operating leverage across both the semiconductor and infrastructure software segments following the VMware integration.
  • Q4 FY2026 guidance of $34.8 billion in revenue, up 93% year over year, includes an AI semiconductor outlook of $21.7 billion, confirming continued acceleration in custom ASIC and networking chip demand.
  • Broadcom's AI networking business — including Tomahawk and Jericho ethernet switching for AI cluster interconnects — also expanded significantly, complementing custom ASIC revenue in the data centre infrastructure stack.

Broadcom (NASDAQ:AVGO) reported fiscal third-quarter 2026 results that demonstrated the company occupies a structurally advantaged position at the intersection of two of the most powerful forces in the semiconductor industry — the transition of hyperscale AI customers to custom application-specific processors, and the explosive growth of high-bandwidth networking infrastructure required to connect AI compute clusters. Revenue of $29.6 billion for the quarter ended 3 August 2026 grew 86% year over year, with AI semiconductor revenue of $16.7 billion representing 56% of total revenue and growing 221% — a rate that underscores the depth of customer commitment to Broadcom's custom chip design capabilities.

AI Semiconductor Becomes the Dominant Revenue Driver

AI semiconductor revenue of $16.7 billion in Q3 FY2026, up 221% year over year, comprises two primary components: custom XPU (AI application-specific integrated circuits) designed to specification for hyperscale customers, and AI networking chips including Tomahawk ethernet switching and Jericho routing products that form the interconnect fabric of large-scale AI training clusters.

Broadcom's custom XPU business is anchored by deep, multi-year co-design relationships with a small number of hyperscale customers who have determined that specialised AI silicon — optimised for their specific model architectures and software stacks — provides superior performance-per-watt and performance-per-dollar compared with general-purpose GPU alternatives. The revenue concentration in a limited number of large customers creates dependency, but also reflects the depth and durability of these relationships.

Infrastructure Software Integration Following VMware

Broadcom's infrastructure software segment, which encompasses the VMware acquisition completed in November 2023, contributed to the company's overall revenue alongside the semiconductor business. VMware revenue, now integrated into Broadcom's reporting, has transitioned toward a subscription-based model following Broadcom's restructuring of VMware's commercial arrangements post-acquisition. Management noted that the software segment continues to generate high-margin recurring revenue, contributing to non-GAAP EPS growth of 96% year over year to $3.32 in Q3 FY2026.

Q4 FY2026 Guidance: $34.8 Billion

For the fourth fiscal quarter of 2026, Broadcom guided total revenue of $34.8 billion, representing 93% year-over-year growth. The company set an AI semiconductor revenue outlook of $21.7 billion for Q4, reflecting continued ramp of custom ASIC volumes for hyperscale customers and anticipated expansion of networking chip deployments as AI cluster scale increases. This guidance positions Broadcom to report full-year FY2026 AI semiconductor revenue well in excess of $60 billion, establishing the segment as the largest single revenue component in the company's history.

Capital Returns and Balance Sheet

Broadcom maintained its dividend and continued share repurchases consistent with its stated capital return programme. Net debt declined as operating cash flow conversion remained high relative to revenue, with non-GAAP operating margins in the mid-50s percent range reflecting the combined benefits of AI semiconductor pricing strength and VMware software subscription margin. Management characterised the forward demand environment for custom AI silicon as being in an early and expanding phase, with the number of hyperscale customers considering custom ASIC alternatives to GPU-based platforms continuing to increase.

Stock Price Information

Broadcom (NASDAQ:AVGO) traded at $194.11 on 29 October 2026, representing a gain of 2.33% on the day, on volume of 32.37 million shares.