Broadcom's stock drops 5% as weak guidance overshadows earnings beat
Broadcom gave a disappointing revenue forecast for the current quarter.
Broadcom’s shares slipped 5% in after‑hours trading on Wednesday after the semiconductor giant delivered guidance for the current quarter that fell short of Wall Street expectations.
Guidance Miss
The company projected fiscal fourth‑quarter revenue of $34.8 billion, a figure that lagged the $35.03 billion analysts had forecast, according to data from LSEG. The shortfall in the outlook prompted the modest decline in the stock price during extended trading.
Earnings Surge
Despite the muted guidance, Broadcom reported a dramatic rise in quarterly results. Revenue climbed 86% year over year to reach $15.95 billion. Net income more than tripled, climbing to $13.09 billion, or $2.68 per share, compared with $4.14 billion, or $0.85 per share, in the same period a year earlier.
AI Chip Wins
Broadcom has positioned itself as a key supplier in the artificial‑intelligence surge, designing custom processors for major players such as Google, Meta and OpenAI. The firm highlighted its newly introduced Jalapeno chip, created in partnership with OpenAI, as a showcase of its AI‑focused portfolio. The stock has appreciated more than sixfold since the close of 2022, a rally that coincided with the rise of ChatGPT and other generative‑AI services, lifting its market value to roughly $1.8 trillion.
Market Performance
Even with the strong earnings, Broadcom’s share price has trailed broader market indices this year. By the close of Wednesday’s trading, the stock had risen about 6% in 2026, while the S&P 500 index posted a 12% gain over the same timeframe.
Segment Details
Revenue from the semiconductor segment more than tripled, reaching $16.7 billion and surpassing the $15.2 billion average estimate compiled by StreetAccount. In contrast, the infrastructure‑software segment generated $8.75 billion, falling slightly short of the $8.82 billion consensus among analysts surveyed by the same source.
Upcoming Call
Broadcom’s senior executives plan to field questions from analysts during a conference call that begins at 5 p.m. Eastern Time. The discussion will focus on the quarterly results, the guidance outlook and the company’s ongoing initiatives in AI‑driven chip design and U.S. manufacturing partnerships, including Apple’s announced increase in spending with Broadcom for domestic chip production.
Source: CNBC · 2026-09-02