Broadcom's stock drops 5% as weak guidance overshadows earnings beat — SkimNews
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- Broadcom dropped 5% in extended Wednesday trading after issuing Q4 guidance of $34.8 billion in revenue, below the $35.03 billion analyst consensus from LSEG.
- Broadcom beat Q3 expectations on both lines: adjusted EPS of $3.32 vs. $3.24 expected, and revenue of $29.59 billion vs. $29.36 billion expected.
- Broadcom's quarterly revenue surged 86% year-over-year from $15.95 billion, while net income more than tripled to $13.09 billion ($2.68 per share).
- Semiconductor revenue at Broadcom more than tripled to $16.7 billion, exceeding the $15.2 billion StreetAccount estimate, while infrastructure software came in slightly light at $8.75 billion vs. $8.82 billion consensus.
- Broadcom highlighted its custom Jalapeno chip co-developed with OpenAI during the quarter, while Apple said it would increase spending with Broadcom on U.S. chip production.
- Broadcom shares have gained only about 6% year-to-date as of Wednesday's close, trailing the S&P 500's 12% gain in 2026, even as the stock has risen more than sixfold since the end of 2022 alongside the AI boom.
Why it matters: For AI-exposed chip designers, the bar has shifted from beating earnings to clearing the next quarter's bar — Broadcom's $34.8 billion Q4 guide was $230 million below consensus, and the stock punished it despite an 86% revenue surge and a triple-digit net income jump. Investors are now drawing a sharper line between current-quarter strength and forward-quarter trajectory, with custom-silicon partners like Google, Meta, and OpenAI on the line.
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