Live News EARNINGS ARTICLE H impact Sep 03, 2026, 10:53 AM UTC

Broadcom flags multi-year AI revenue surge, touts OpenAI chip

Broadcom said fourth-quarter revenue will be about $34.8 billion versus estimates of $35.03 billion, while CEO Hock Tan projected AI semiconductor revenue could reach $115 billion in fiscal 2027 and $230 billion in 2028.

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SquawkNews Newsroom 1 updates Updated Sep 03, 2026, 10:55 AM UTC

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Broadcom Inc. (NASDAQ: AVGO ) is positive on generating billions of dollars in AI revenue, but believes issues around supply chain constraints and the actual deployment of data centers remain. Demand Still Outpaces Supply Amid AI Boom When asked about business doubling next year but demand still outpacing it and any potential supply bottlenecks, CEO Hock Tan said on the company’s fiscal third quarter earnings call that “we’re very careful and, to be honest, we try to be conservative. So we’re giving you an outlook and, yeah, demand—we can ship significantly more.” On Wednesday, Broadcom said that it expects AI revenue to double to $115 billion in fiscal 2027 and to double again to $230 billion in fiscal 2028, supported by secured supply lines and customer demand. Tan went on to say that, “certainly our customers want us to ship more, but we have secured supply and we think it’s the right number to put it to 115. And if circumstances change and our ability to scale more supply change, of course we will uplift.” Data Center Deployments Still Face Challenges Tan also addressed other concerns related to land, power, and shell, or LPS, when it comes to data center deployments, and potential impacts on outlook. “It’s a multidimensional issue to get an AI data center deployed. Yeah, we now are more sensitive about, especially at scale, and we are now delivering at scale to our customers. XPUs—AI data centers built upon XPU computing accelerators—land, power, and shell. As I indicated, the question with will is a big concern. It’s more than a big concern. It dictates specific timing of when this capacity gets deployed and be available,” said Tan. Tan also talked about High-Bandwidth Memory, or HBM, chip constraints, which the company does not supply but its customers secure for their needs, as a bottleneck. “And of course we all know about memory, HBM memory, and beyond HBM memory, the system memory that goes into AI servers, which we don’t supply necessarily but our customers have to secure too. So all this is a multidimensional problem coming from various sources, and then depending on different times each might become a bottleneck,” Tan commented. Read Also: Why Broadcom CEO Hock Tan Called Anthropic and OpenAI 'Two Geniuses in the Middle of Mongolia' Softer Q4 Guidance Weighs on Strong Q3 Results Broadcom reported fiscal third-quarter revenue of $29.59 billion, beating estimates of $29.36 billion, while adjusted earnings of $3.32 per share also beat estimates of $3.24 per share, according to Pro. However, the company’s fiscal fourth quarter guidance seemed slightly underwhelming to investors, following which shares fell nearly 4% premarket on Thursday. “$AVGO -7% AH after 3Q results beat ests but 4Q rev guidance fell slightly short of analysts’ expectations ($34.8B vs $35.0B est),” said Gary Black, Managing Partner, The Future Fund LLC, in a post on X. “As the AI Rev strength becomes clearer to investors I expect the stock to recover somewhat.” $AVGO

Despite weak fourth-quarter guidance, Broadcom Inc.’s (NASDAQ: AVGO ) management revealed a multi-year AI revenue outlook and touted its custom silicon, which “Mad Money” host Jim Cramer dubbed as an upcoming “explosion of business.” Meanwhile, CEO Hock Tan claimed in the earnings call that Broadcom’s custom chip for OpenAI outperforms Nvidia Corp. ’s (NASDAQ: NVDA ) flagship Grace Blackwell for significantly less money.

Doubling Down on the Future Despite a double beat in the third quarter, Broadcom issued soft guidance, expecting fourth-quarter revenue of approximately $34.8 billion versus estimates of $35.03 billion.

Looking ahead, Tan mapped out an aggressive growth trajectory, projecting AI semiconductor revenue to double to approximately $115 billion in fiscal 2027 and double again to $230 billion in 2028.

Anthropic is slated to deploy 5 gigawatts of compute in 2027 and another 10 gigawatts in 2028, cementing its status as Broadcom’s largest custom chip customer, while OpenAI plans to deploy 1.3 gigawatts of AVGO’s custom Jalapeno chip next year.

Following the management comments on AVGO’s trajectory, Cramer added in an X post that “Broadcom tells a story of an explosion of business coming.” So Snowflake remains the best way for the uncertain to get compute but Broadcom tells a story of an explosion of business coming.

Snowflake will have a huge move….

Broadcom? More nuanced… — Jim Cramer (@jimcramer) September 3, 2026 Read Also: Michael Burry Warns of a Private Credit 'Shell Game' That Could Leave Taxpayers on the Hook: APO, KKR, OWL In Focus Taking Aim at Nvidia With ‘Jalapeno’ On the earnings call, Tan took direct aim at the current GPU market leader.

He highlighted “Jalapeno,” OpenAI’s first-generation custom accelerator built by Broadcom.

Tan stated that Jalapeno “outperforms the Grace Blackwell Ultra in performance per watt, latency, throughput, and power” for inference workloads.

Pointing to the economic advantage of specialized hardware, Tan noted that a chip optimized for specific large language models will “outperform any GPU” and can do so “at half the cost of a GPU.” The ‘Overtime Save’ and AI Surge Broadcom shares initially slumped over 5% after hours after the weak fourth-quarter revenue guidance; however, the stock recovered as the market digested a historic surge in custom AI chip demand.

Third-quarter AI semiconductor revenue hit $16.7 billion, up 221% year-over-year.

Total third-quarter revenue reached a record $29.6 billion, with non-GAAP earnings of $3.32 per share beating expectations.

The dramatic turnaround in sentiment prompted Cramer to call the print an “overtime save.” Snowflake a thing of beauty.

AVGO an overtime save… — Jim Cramer (@jimcramer) September 2, 2026 How Has Broadcom Performed in 2026? Price Action: At the last check, the AVGO stock was trading 3.11% lower in premarket trading on Thursday.

It was up 6.11% year-to-date, advancing by 23.14% over the last year, and rose 15.19% over the last six months.

It closed 0.66% lower at $367.24 per share on Wednesday.

Edge Stock Rankings indicate that AVGO maintains a strong price trend in the long term but a weak trend in the short and medium terms, with a poor growth score.

Read Also: Cathie Wood’s ARK Invest Says Amazon Has a Potential $1 Trillion AI Business Hiding in Plain Sight Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published editors.

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