How much of Broadcom's 86% revenue surge is AI?

Sonal Goyal

28 October 2026 05:00 PM AEDT

How much of Broadcom's 86% revenue surge is AI?

Image Source: Shutterstock

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

Key Highlights

Broadcom reported third-quarter fiscal 2026 net Revenue of $29.591 billion, up 86% from $15.952 billion a year earlier.
AI semiconductor revenue was $16.7 billion, up 221% year on year and 54% from the previous quarter.
For the fourth quarter the company guided to revenue of about $34.8 billion and AI semiconductor revenue of about $21.7 billion.

Latest results

Broadcom Inc. (NASDAQ:AVGO), which trades on The Nasdaq Global Select Market, reported third-quarter fiscal 2026 results on 2 September 2026 for the quarter ended 2 August. Net revenue was $29.591 billion, up 86% from $15.952 billion a year earlier.

Semiconductor solutions revenue was $20.839 billion, or 70% of the total, up 127% from $9.166 billion. Infrastructure software revenue was $8.752 billion, or 30%, up 29% from $6.786 billion.

The AI contribution

AI semiconductor revenue was $16.7 billion, up 221% year on year and 54% from the previous quarter. AI semiconductor revenue was also roughly 56% of total company revenue.

Chief executive Hock Tan said Demand for the company's custom AI accelerators and networking continues to be very high. That is a management statement; the company's guidance gives the quantified expectation.

Profit, Cash Flow and Capital returns

GAAP Operating Income was $15.955 billion and non-GAAP operating income was $20.095 billion. Diluted Earnings per Share were $2.68 on a GAAP basis and $3.32 on a non-GAAP basis. GAAP Net Income was $13.1 billion, and non-GAAP net income was $16.4 billion.

Gross Margin was about 69.1% on a GAAP basis and 75.0% on a non-GAAP basis, while the Operating Margin was about 53.9% on a GAAP basis and 67.9% on a non-GAAP basis. Research and Development expense was $2.895 billion on a GAAP basis, and selling, general and administrative expense was $996 million.

Cash from operations was $14.2 billion and free cash flow was $13.7 billion, or 46% of revenue. Management described free cash flow as the highest to date. The board declared a quarterly Dividend of $0.65 per share, payable on 30 September 2026 to holders of record on 21 September. Dividends paid in the quarter totalled $3.103 billion. Diluted weighted-average shares were 4.887 billion on a GAAP basis.

Broadcom made no repurchases under its programme in the quarter, compared with $600 million in the second quarter. Repurchases for the nine months to 2 August 2026 were $8.45 billion, against $2.45 billion in the prior-year period.

Balance sheet

Cash and equivalents were $24.0 billion, up from $19.6 billion at the previous quarter end. Short-Term Debt was $2.252 billion and long-term debt $57.167 billion, a total of about $59.4 billion, down from about $65.1 billion at 2 November 2025.

Inventory was $4.523 billion, up from $2.270 billion at 2 November 2025, a rise that sits alongside the rapid growth in revenue. Capital Expenditure was $532 million.

Guidance and what to watch

For the fourth quarter, which ends on 1 November 2026, Broadcom guided to revenue of about $34.8 billion, up 93% year on year, and AI semiconductor revenue of about $21.7 billion, up 236%. It expects non-GAAP operating income of about 66% of revenue, flat from a year ago. These are company expectations, not reported results.

Points to watch include whether the fourth quarter meets the guidance, how large AI revenue becomes relative to the non-AI portfolio, whether debt continues to fall, and whether repurchases resume.

FAQs

Q: What was Broadcom's revenue in the third quarter of fiscal 2026?

A: Net revenue was $29.591 billion, up 86% from $15.952 billion a year earlier. Semiconductor solutions made up 70% of the total and infrastructure software 30%.

Q: How much of Broadcom's revenue came from AI?

A: AI semiconductor revenue was $16.7 billion, up 221% year on year, or roughly 56% of total company revenue.

Q: What is Broadcom's guidance for the fourth quarter?

A: Broadcom guided to revenue of about $34.8 billion, up 93% year on year, and AI semiconductor revenue of about $21.7 billion. It expects non-GAAP operating income of about 66% of revenue.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.