Broadcom raises AI sales forecast as stock lingers 29% below its high

Broadcom just posted an 86% jump in quarterly revenue and tripled its AI chip sales. The stock fell anyway.

The semiconductor giant reported fiscal Q3 2026 revenue of $29.59 billion, with AI semiconductor revenue alone hitting $16.7 billion, a 221% increase year-over-year. The company raised its full-year AI revenue forecast to $58 billion from $56 billion and laid out projections that would make most CFOs sweat through their collar: $115 billion in AI chip revenue for fiscal 2027 and $230 billion for fiscal 2028.

And yet, shares are trading around $353, roughly 29% below their 52-week high of $495 and up a modest 6% on the year.

The numbers behind the paradox

The culprit for the post-earnings dip was Broadcom’s Q4 fiscal 2026 revenue guidance of approximately $34.8 billion, which landed slightly below what some analysts had penciled in. In a market that prices stocks on forward expectations rather than backward triumphs, “slightly below” is all it takes to trigger a sell-the-news reaction.

That said, the Q4 guide still implies AI revenue of about $21.7 billion for the quarter, which would represent a 236% increase from the same period last year.

Broadcom’s fiscal Q3 AI revenue of $16.7 billion was more than triple the year-ago figure. Its prior AI revenue target for fiscal 2027 was $100 billion, which it quietly bumped to $115 billion. The fiscal 2028 projection of $230 billion, if realized, would represent a doubling from 2027.

For the full fiscal year 2026, the updated $58 billion AI revenue forecast means AI chips now constitute the dominant share of Broadcom’s overall business.

Why the stock can’t catch a bid

Broadcom’s stock price ran up aggressively through late 2025 and into early 2026, peaking near $495. At those levels, the market had already priced in substantial AI-driven growth.

Broadcom’s customer list offers some reassurance on that front. The company counts Google, Meta, OpenAI, and Anthropic among its key clients, all of which have publicly committed to spending tens of billions on AI infrastructure. Multi-year contracts with these players give Broadcom unusual revenue visibility compared to many of its peers.

The average analyst price target sits around $533, which implies roughly 50% upside from current levels.

One key dynamic that analysts have flagged: supply constraints, not demand weakness, are the binding factor on Broadcom’s near-term growth.

The competitive landscape is heating up

The company’s strategy has been to position itself as the go-to partner for companies that want custom AI chips rather than off-the-shelf GPUs. But it also means Broadcom’s fortunes are tied to a relatively concentrated set of large customers, each of whom could theoretically bring more chip design in-house over time.

Broadcom’s networking products, including its Ethernet switching silicon, are essential for connecting the GPU clusters that power large language models and other AI workloads.

The stock’s 6% year-to-date gain looks especially underwhelming when you consider that earnings are roughly 43% higher than where they stood at the start of the year.

Whether the market re-rates Broadcom higher will likely depend on whether Q4 results come in above that conservative $34.8 billion guide, and whether the broader market shakes off its anxiety about AI spending sustainability. Every major cloud provider is still talking about increasing, not decreasing, their AI capital expenditure budgets.

Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.