Broadcom AI Chip Revenue Soars, Yet Stock Slides After Q3 Beat

AVGO delivered a record third quarter, posting consolidated revenue of $29.6 billion, up 86% year over year, with AI semiconductor revenue up 221% to $16.7 billion and up 54% sequentially . Custom AI accelerators, the XPUs Broadcom designs for hyperscale customers, made up the majority of that AI figure, and CEO Hock Tan said the company shipped Google's Ironwood TPU v7 in high volume during the quarter.

The market response was cooler than the print. Broadcom shares fell nearly 3% on the session Zacks measured, while other outlets marked a 5% to 6% decline over a slightly different window, all of it pinned on Q4 guidance that came in below some Wall Street targets . The stock is now down almost 15% over the past month at around $358, trades at roughly 34 times forward earnings, and sits more than 25% below its all‑time closing high of $480.77 set on June 2, 2026.

The guidance that disappointed is not, on its face, a weak number. Broadcom guided Q4 AI semiconductor revenue to $21.7 billion, up 236% year over year, and framed full‑year fiscal 2026 AI revenue at $58 billion with a stated line of sight to $115 billion in fiscal 2027 and $230 billion in fiscal 2028. That fiscal 2027 figure is the concrete version of the widely repeated claim that AI chip revenue will roughly double next year.

Broadcom's position rests on designing custom silicon for a short list of very large buyers, reported to include Google, Meta, Anthropic and OpenAI, which is both the strength and the concentration risk in the story. The gap between a 221% growth quarter and a share price a quarter off its highs is the question investors are actually arguing about: whether the multiple already prices in the roadmap management just laid out, or whether the guidance shortfall is the first sign that the ramp is lumpier than the annual targets imply.

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