Broadcom's stock drops 5% as weak guidance overshadows earnings beat
Broadcom gave a disappointing revenue forecast for the current quarter.
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Broadcom CEO Hock Tan speaks at the Bloomberg Tech conference in San Francisco on June 4, 2026.
David Paul Morris | Bloomberg | Getty Images
Broadcom shares dropped 5% in extended trading on Wednesday after the chipmaker issued disappointing guidance for the current quarter.
Here's how the company did in comparison with LSEG consensus:
Earnings per share: $3.32 adjusted vs. $3.24 expectedRevenue: $29.59 billion vs. $29.36 billion expectedFor the fiscal fourth quarter, Broadcom said it expects revenue of $34.8 billion, while analysts were expecting $35.03 billion, according to LSEG.
Broadcom's revenue increased 86% during the quarter from $15.95 billion a year ago, according to a statement. Net income more than tripled to $13.09 billion, or $2.68 per share, from $4.14 billion, or 85 cents per share a year earlier.
Broadcom has been one of the major winners of the artificial intelligence boom, designing custom chips for companies including Google, Meta and OpenAI. The stock has jumped by more than sixfold since the end of 2022, coinciding with the emergence of ChatGPT and other generative AI services, pushing its market cap to about $1.8 trillion.
But the shares have lagged the broader indexes this year. As of Wednesday's close, Broadcom shares had gained about 6% in 2026, while the S&P 500 index is up 12% in the same period.
During the quarter, Broadcom touted the custom Jalapeno chip it developed with OpenAI, while Apple said it would spend more with Broadcom for U.S. chip production.
CEO Hock Tan said Broadcom expects to speed up shipments of Google Ironwood tensor processing units to Anthropic and TPU 8i chips to Google.
He said Broadcom will deliver tens of billions of dollars of processors to Google each year for the next several years.
"Shipments of Jalapeno for OpenAI will continue, and for Meta, we expect production shipments of their custom MTIA accelerator optimized for inference and recommendation at scale," Tan said.
Broadcom is looking for Anthropic to deploy deploy five gigawatts of TPU 8i chips in 2027, with line of sight to deliver another 10 gigawatts, Tan said.
Semiconductor revenue more than tripled to $16.7 billion, exceeding the $15.2 billion average estimate, according to StreetAccount. Broadcom said it generated $8.75 billion from infrastructure software, less than the $8.82 billion consensus among analysts polled by StreetAccount.
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