Broadcom (NASDAQ:AVGO) Records Explosive AI Semiconductor Growth as Q3 Revenue Surges

Aditi Sarkar

11 November 2026 03:14 PM AEDT

Broadcom (NASDAQ:AVGO) Records Explosive AI Semiconductor Growth as Q3 Revenue Surges

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Highlights

Q3 FY2026 Revenue was a record $29.6 billion, up 86% year-over-year, with AI semiconductor revenue surging 221% year-over-year to $16.7 billion — representing 56% of total revenue.
Non-GAAP diluted EPS was $3.32, up 96% year-over-year; free Cash Flow was $13.7 billion, or 46% of revenue.
Semiconductor solutions revenue was $20.8 billion (+127% YoY) and infrastructure software revenue was $8.75 billion (+29% YoY).
Q4 FY2026 revenue guidance of approximately $34.8 billion, up 93% year-over-year, with AI semiconductor revenue expected to accelerate further to $21.7 billion.

Broadcom (NASDAQ:AVGO) delivered record third-quarter fiscal 2026 results, achieving explosive growth in its AI semiconductor Business as hyperscale cloud customers and AI infrastructure builders accelerated deployments of Broadcom's custom accelerators and high-speed networking components.

AI Semiconductor Business Transforms Revenue Profile

Total net revenue for the fiscal third quarter ended August 2, 2026 was $29.6 billion, up 86% from $15.95 billion in the same quarter a year earlier. AI semiconductor revenue was $16.7 billion, up 221% year-over-year and 54% sequentially, accounting for 56% of total company revenue. CEO Hock Tan described Demand for custom AI accelerators and networking as "very strong" in the official press release. Semiconductor solutions as a whole generated $20.8 billion, representing 70% of total revenue, up 127% year-over-year.

Non-GAAP Operating Income was $20.1 billion, non-GAAP diluted EPS was $3.32, and free cash flow of $13.7 billion represented 46% of revenue. GAAP diluted EPS was $2.68. Cash and cash equivalents at quarter-end were $24.0 billion. The company declared a quarterly common Stock Dividend of $0.65 per share.

Infrastructure Software Segment Maintains Steady Growth

Infrastructure software revenue, which primarily reflects VMware licensing and related enterprise software, contributed $8.75 billion, up 29% year-over-year. The steady growth of this segment, though slower than the AI semiconductor business, provides a high-margin and Recurring Revenue base that diversifies Broadcom's overall Earnings profile. Combined with the AI semiconductor tailwind, the two segments generated non-GAAP operating margins of approximately 68%.

Record Free Cash Flow and Capital Returns

Broadcom generated $14.2 billion in cash from operations during the quarter, with capital expenditures of only $0.5 billion, resulting in $13.7 billion of free cash flow — the highest in the company's history. CFO Amie Thuener described the quarter as achieving record revenue, operating profit, and free cash flow simultaneously, with non-GAAP operating income growth of 92% year-over-year. The company's asset-light model, in which it designs custom chips but outsources manufacturing, allows Broadcom to maintain exceptionally high free cash flow conversion rates even at scale.

Q4 Guidance Implies Continued Acceleration

For the fourth quarter of fiscal 2026, ending November 1, 2026, Broadcom guided revenue to approximately $34.8 billion, up 93% year-over-year. AI semiconductor revenue in Q4 is expected to reach $21.7 billion, up 236% year-over-year. Non-GAAP operating income is expected to be approximately 66% of projected revenue, flat sequentially.

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