Broadcom Beats Earnings, Stock Falls Anyway on Guidance

Broadcom beat Wall Street's expectations on both revenue and earnings for its fiscal third quarter, and investors sold the stock anyway, extending a pattern that's now cost the company roughly $520 billion in market value since June, according to Bloomberg's reporting on the results.

Broadcom's third-quarter results were genuinely strong on their own terms. Adjusted earnings per share came in at $3.32 versus the $3.24 Wall Street expected, and revenue rose 86% year over year to $29.6 billion, topping the $29.36 billion consensus, according to CNBC's reporting on the earnings. Semiconductor revenue more than tripled to $16.7 billion, beating the $15.2 billion average estimate. But the company's fourth-quarter guidance fell short, with Broadcom projecting $34.8 billion in revenue against a Wall Street consensus of roughly $35.05 billion, triggering a 5% after-hours stock decline.

Broadcom's Q3 FY2026 Results vs. Guidance

The core dynamic here is worth understanding directly, since it reflects a genuine shift in how markets are treating AI infrastructure stocks this earnings season. StoneX financial equity research analyst Cody Acree captured the mismatch plainly: "I can understand the selling pressure. The magnitude is not quite enough from a top and bottom line standpoint on the beat and raise when you have a company that is this levered to AI," according to Yahoo Finance's reporting on the reaction. In other words, a modest beat simply isn't enough for a stock priced for AI-driven acceleration. Investors expected a bigger surprise, not just confirmation of the existing trend.

Buried inside the earnings call was the detail that appears to have most disappointed investors. CEO Hock Tan raised his fiscal 2027 AI revenue guidance to $115 billion, up from the roughly $100 billion figure he'd reiterated last quarter, a story we covered in detail in our earlier reporting on Broadcom's $100 billion AI forecast and the customer concentration risk weighing on the stock. According to CNBC's analysis of the call, many analysts had expected a considerably larger raise, somewhere in the $20 billion to $25 billion range, meaning even a genuinely bullish updated forecast landed as a letdown relative to expectations that had already run ahead of it.

The earnings call did include genuinely positive concrete developments. Broadcom touted its custom Jalapeño chip developed in partnership with OpenAI, connected directly to our earlier coverage of that chip's benchmark results against Nvidia's GB300, while Apple confirmed it will increase spending with Broadcom for U.S.-based chip production, according to CNBC's reporting.

This report lands directly in the shadow of a much stronger comparison point. Nvidia's own blowout earnings just a week earlier, projecting 70% sales growth for its next fiscal year, sent that stock to its best trading day since April 2025, according to Bloomberg's reporting. Broadcom shares are up just 6% year to date, compared to Nvidia's roughly 20% gain over the same period, even though analyst Cody Acree noted Broadcom "is really just second only to Nvidia as far as its ecosystem across the data center."

This report is worth understanding for any business evaluating AI infrastructure vendors or investing in AI-adjacent public companies, since it reinforces a pattern that's now playing out repeatedly across this earnings season: genuinely strong, real growth numbers are no longer sufficient on their own if they fail to exceed already-elevated market expectations, particularly for companies whose valuations are heavily priced around AI-driven acceleration.

For businesses tracking Broadcom specifically as an AI infrastructure partner, the raised $115 billion fiscal 2027 target, even if it disappointed Wall Street's higher expectations, still represents a meaningful increase in the company's own confidence about future AI chip demand, worth separating from the stock's short-term reaction.

Did Broadcom beat or miss earnings expectations?
Broadcom beat expectations on both earnings per share ($3.32 versus $3.24 expected) and revenue ($29.6 billion versus $29.36 billion expected) for its fiscal third quarter, but its fourth-quarter revenue guidance of $34.8 billion fell short of the $35.05 billion analysts expected.

Why did Broadcom's stock fall after beating earnings?
Investors were disappointed that the magnitude of the beat and forward guidance wasn't large enough for a stock heavily priced around AI-driven growth expectations, with analysts specifically noting the raised AI revenue forecast fell short of the larger increase many had anticipated.

What is Broadcom's updated AI revenue forecast?
CEO Hock Tan raised Broadcom's fiscal 2027 AI revenue guidance to $115 billion, up from the roughly $100 billion figure the company had maintained the previous quarter, though the increase was smaller than many analysts expected.

Broadcom beat Wall Street's earnings and revenue expectations for its fiscal third quarter but saw shares fall roughly 5% after its fourth-quarter revenue guidance of $34.8 billion missed the $35.05 billion consensus, extending a decline that has cost the company roughly $520 billion in market value since June. CEO Hock Tan raised Broadcom's fiscal 2027 AI revenue forecast to $115 billion from roughly $100 billion, though the increase fell short of what many analysts had expected. The results highlighted a broader earnings season pattern where genuinely strong growth numbers are increasingly insufficient to satisfy markets pricing AI infrastructure stocks for continued acceleration, particularly following Nvidia's stronger recent results and guidance.