Broadcom (AVGO) AI Revenue Soars, But Wall Street Wants More

Broadcom Inc. (NASDAQ:AVGO) revealed impressive financial results for the third quarter of fiscal year 2026 on September 2. The company's stock soared as AI-related demand continued to surge. However, Wall Street's expectations for future performance were less optimistic. Broadcom reported $29.6 billion in revenue, marking an 86% increase compared to the previous year.

Non-GAAP operating income climbed 92% year-over-year as well. The company's strong performance was primarily driven by a 221% surge in AI semiconductor revenue, reaching $16.7 billion for the quarter. Broadcom anticipates this trend to persist into the fourth quarter, with guidance for AI semiconductor revenue of $21.7 billion, representing a 236% year-over-year increase.

Despite these strong numbers, analysts remain cautiously optimistic. Truist Securities reduced its price target for Broadcom from $550 to $520, citing a Buy rating but noting that the company's AI revenue outlook fell slightly short of market expectations. RBC Capital maintained its Sector Perform rating while raising its price target to $400.

Overall, Broadcom's AI business continues to show exceptional growth, but investors are demanding more as they assess the company's prospects.