Broadcom earnings preview centers on AI customers, Google competition

Broadcom Inc. (NASDAQ: AVGO ) is due to report fiscal third-quarter earnings after the bell Wednesday, with prediction traders seeing little suspense over whether it beats expectations. The bigger question may be what CEO Hock Tan says about Broadcom’s AI customers and rising competition for Google’s custom-chip business. Polymarket prices a 98% chance Broadcom beats quarterly earnings, while Kalshi traders are focused on which companies and technologies Tan will mention during the 5 p.m.

ET earnings call. Analysts expect about $29.4 billion in revenue and adjusted earnings of $3.24 per share, according to Pro. Broadcom has guided AI semiconductor revenue to $16 billion, up more than 200% year over year. On Kalshi, "OpenAI" leads at 96%.

OpenAI designed its first custom inference chip, Jalapeño, with Broadcom turning it into production silicon and building the networking and rack systems around it. OpenAI says its own tests showed Jalapeño delivering up to 3.6 times lower end-to-end latency than the Nvidia systems it tested against, though the results have not been independently verified. "VMware" trades at 94%. Broadcom paid $69 billion for the Broadcom’s VMware business, acquired in 2023, has given it a larger position in the systems companies use to run private clouds and virtual servers.

Tan said the AI buildout is also supporting VMware as customers add more GPU-heavy servers and private-cloud infrastructure. Anthropic sits at 92%. Broadcom said it is providing Anthropic access to more than 1 gigawatt of TPU-based compute this year, with another 5 gigawatts of next-generation capacity beginning in 2027. Google trades at 84%.

Google helped establish Broadcom’s custom AI-chip business through its TPU program, and investors are watching for signs it is shifting work to rivals. Alphabet Inc. (NASDAQ: GOOGL ) recently expanded its chip relationship with Broadcom competitor Marvell, sending Broadcom shares down more than 5%, although JPMorgan says Marvell has not won Google’s core TPU accelerator and Broadcom remains the volume partner for the next four TPU generations. Tomahawk 6 sits at 75%.

Broadcom’s 100-terabit Ethernet switch chip connects thousands of AI accelerators inside data centers, giving the company a way to profit from AI infrastructure even when Nvidia or another supplier provides the processors. Will Skip "Competition" trades at just 28%, despite Google’s decision to add another custom-chip partner becoming one of the biggest questions heading into earnings. Tan addressed the issue last quarter without using the word. Asked about Google adding suppliers, he said the company would likely use a "diversity of sources." "Jericho 4" is at 45% and "Optic" is at 39%.

Both are part of Broadcom’s AI networking business, but traders appear to expect Tan to focus on customers and overall AI demand rather than on individual networking products. The near-certain Polymarket earnings beat shows where the bar now sits: simply clearing Wall Street estimates may not move AVGO higher. JPMorgan believes fiscal 2027 AI revenue could exceed $130 billion, versus Broadcom’s guidance for more than $100 billion. Whether Tan gives investors confidence in that trajectory, and Broadcom’s position at Google, may matter more than the headline earnings beat.

Kalshi and have an existing data collaboration agreement.