Broadcom's AI semiconductor revenue hit $16.7 billion in its fiscal third quarter, up 221% from a year earlier and now representing 56% of total revenue. The company raised its AI revenue guidance for fiscal 2026 and beyond, even as investors reacted cautiously to the results.
Broadcom's AI chip business generated $16.7 billion in revenue for the quarter ended August 2, a 221% jump from a year earlier and a 54% increase from the prior quarter alone.
That growth pushed the AI segment to roughly 56% of Broadcom's total revenue, which reached $29.6 billion for the quarter, up 86% from the same period last year.
New contracts outpace revenue recognition
Broadcom's semiconductor solutions category, the broader bucket that includes its AI products, generated $20.8 billion in revenue, a 127% increase year-over-year, driven largely by demand for custom AI accelerators and networking products.
The company's remaining performance obligations stood at approximately $179.2 billion as of August 2, up from $164.6 billion the prior quarter — a $14.6 billion increase in a single quarter that signals new contracts are being signed faster than revenue is recognized.
Broadcom counts Alphabet, Anthropic, OpenAI, and Meta Platforms among its major customers for the custom AI accelerators, known as XPUs or ASICs, that the company designs.
Guidance keeps climbing
Management raised its full-year fiscal 2026 AI revenue guidance to approximately $58 billion. For the fourth quarter, Broadcom expects AI semiconductor revenue of about $21.7 billion, a 236% increase from the year-ago quarter, with total revenue projected at roughly $34.8 billion.
The company is forecasting AI revenue of around $115 billion for fiscal 2027 and approximately $230 billion for fiscal 2028.
Investors focus on caution, not the headline figures
Despite the blockbuster numbers, the stock market's reaction was mixed, as some investors reportedly focused on cautious elements within the guidance rather than the headline growth figures.
Source: Crypto Briefing
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