Broadcom Inc.

Q3 FY26 results: record profitability driven by AI semis - Revenue: $29.6B, +86% YoY (record). - Operating income: $20.1B, +92% YoY; operating margin ~67.9% (up 240 bps YoY), reflecting strong operating leverage despite margin pressure. - Free cash flow: $13.7B (46% of revenue, record). - Non-GAAP EPS: $3.32, +96% YoY. - Key mix impact (negative-ish): gross margin ~75%, down 210 bps sequentially due to higher AI semiconductor mix (AI memory content dilutes GM).

AI semiconductor momentum is the central story (and it’s accelerating) - AI semiconductor revenue: $16.7B, +221% YoY, +54% sequentially. - XPU customers: “6 XPU customers” accelerating deployments. - XPU revenue: more than tripled YoY; 73% of AI revenue in the quarter. - XPU shipments: +3.5x YoY. - Product milestones (surprising/important operational cadence): - Ironwood TPU v7 shipped in high volume to Anthropic and Google. - TPU v8i: began production shipments to Google (described as ahead of a competitor’s version timeline; still characterized as an advanced inferrence-optimized design with more memory/bandwidth). - Jalapeno shipped to OpenAI (claims: outperforms Grace Blackwell GPU for inference, “comparable to Vera Rubin GPU” on OpenAI workloads). - Meta MTIA: production shipments expected for inference/recommendation at scale.

Guidance: Q4 is expected to surge; FY26 AI outlook raised/confirmed at a very high growth rate - Q4 consolidated revenue: $34.8B, +93% YoY. - Q4 AI revenue: $21.7B, +236% YoY; operating margin ~66% (lower than Q3 margin expectations due to mix). - Q4 semiconductor revenue: ~$26.1B, +136% YoY. - Q4 infrastructure software revenue: ~$8.7B, up ~25% YoY. - FY26 AI semiconductor revenue: ~$58B, +186% YoY (cited as above prior guidance). - FY27 / FY28 AI semiconductor forecasts (opportunity + risk, because supply-sensitive): - FY27 AI revenue: ~$115B (company expectation: double). - FY28 AI revenue: ~$230B (company expectation: double again). - Management emphasized this as conservative and not intended to be updated quarterly—a major investor takeaway.