Broadcom reports fiscal third-quarter earnings after the market closes on September 2, with management guiding for $16 billion in AI semiconductor revenue, more than 200% growth from a year ago. The report also serves as a test of investor concern that Alphabet's expanding chip relationship with Marvell Technology is cutting into Broadcom's business.
Broadcom reports fiscal third-quarter results after the market closes on September 2, and the figure investors are watching most closely is $16 billion — the AI semiconductor revenue management has guided for, more than 200% growth from a year ago. Hitting that number would help ease concern that Alphabet is shifting custom chip business away from Broadcom toward Marvell Technology.
Alphabet-Marvell deal weighs on the stock
The stock is up 6% this year, about half the S&P 500's 12% gain, as investors weigh Alphabet's expanding chip relationship with Marvell Technology. Marvell issued a warrant giving Google the right to buy up to 58.9 million Marvell shares at $206.58 per share, or about $12.2 billion. Marvell's filing states the deal covers products tied to Google's Tensor Processing Unit ecosystem.
Broadcom's stock fell sharply in April when the report first surfaced, while Marvell shares are up 147% this year.
Q2 momentum sets the bar for Q3
The company enters the report on a strong run. Fiscal second-quarter revenue reached $22.18 billion, up 48% from a year ago, while net income of $9.31 billion rose 88%.
CEO Hock Tan said AI semiconductor revenue of $10.8 billion in Q2 grew 143% year-over-year, above the company's forecast, and that he expects that growth to continue to $16 billion in Q3. Broadcom's own guidance also points to total quarterly revenue of about $29.4 billion, an 84% increase from a year earlier. The company reported a record adjusted EBITDA margin of 69% in Q2.
For Q3, management has guided non-GAAP operating margin to roughly 67%.
AI customer base extends past Alphabet
Alphabet remains a key customer through its custom Tensor Processing Units. Broadcom's AI semiconductor client roster also includes OpenAI, Anthropic and Meta. Networking products accounted for about 40% of AI semiconductor revenue in Q2.
Management has reaffirmed a full-year AI semiconductor revenue target of $56 billion, roughly 180% growth for fiscal 2026. The company has also projected AI semiconductor revenue exceeding $100 billion in fiscal 2027.
The stock has pulled back from a 52-week high near $495 to a recent range of $368 to $400, as some investors question how hyperscalers are financing their AI buildouts.
Sources: The Motley Fool, Crypto Briefing
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