Gary Black expects Broadcom shares to recover after earnings
Gary Black said Broadcom shares should recover as investors recognize AI revenue strength after third-quarter results and updated guidance. He cited $16.7 billion in quarterly AI revenue and $21.7 billion guided for the fourth quarter.
Broadcom shares fell on Thursday after the company reported third-quarter results and updated guidance after the close on Wednesday. Future Fund Managing Partner Gary Black said he expects the stock to recover as investors absorb the AI revenue details from the earnings call. Black cited CEO Hock Tan’s view that AI chip demand is running ahead of current shipping capacity. Broadcom reported third-quarter AI revenue of $16.7 billion, up 221% year over year, versus a Street consensus estimate of $15.9 billion.
The company guided for fourth-quarter AI revenue of $21.7 billion, which would be up 236% year over year and above a Street consensus estimate of $21.3 billion. For fiscal 2026, Broadcom said it sees AI revenue reaching $58 billion. Black said the company’s total would be $56 billion, up 186% year-over-year, from a previous guide of $56 billion. He said the AI segment is the reason he is excited and why he thinks the stock drop in after-hours Wednesday was an overreaction.
Broadcom stock is down 6.7% to $342.61 on Thursday, versus a 52-week trading range of $289.96 to $495.00. The shares are up 1.4% year-to-date in 2026 and are trading at levels last seen in April 2026. Black expects a recovery soon, and said investors may be waiting to see how important AI and future growth are for the company and its share price.