On September 3, Broadcom fell 3.8% in regular trading, trading at $347.18/share, with turnover of $2.125 billion. The decline followed the release of its FY26 third fiscal quarter earnings, where strong results were overshadowed by a softer-than-expected Q4 revenue outlook.

Broadcom posted Q3 revenue of $29.59 billion, up 86% year-over-year and exceeding the consensus estimate of $29.24 billion. Adjusted EPS came in at $3.32, a 96% increase and above the $3.22 estimate. AI semiconductor revenue surged 221% to $16.7 billion. However, Q4 revenue guidance of approximately $34.8 billion fell short of analyst expectations ranging from $35.05 billion to as high as $36 billion. The company also guided Q4 gross margin to approximately 73%, down from 78% a year ago, adding to margin concerns.

Despite near-term headwinds, CEO Hock Tan projected FY28 AI semiconductor revenue reaching $230 billion, citing deepening partnerships with Anthropic, OpenAI, Google, and Meta. The company raised its FY26 AI revenue guidance from $56 billion to $58 billion. Separately, HSBC lowered its price target on Broadcom from $600 to $560, further weighing on sentiment.

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