Broadcom shares fell 3.98% to $352.64 Thursday, extending a slide that began after Wednesday's fiscal third-quarter earnings report, as a fourth-quarter revenue forecast that came in below Wall Street estimates overshadowed a blowout AI chip quarter. The stock has now sunk to near five-month lows even though the company posted revenue of $29.6 billion, up 86% year over year and ahead of the $29.4 billion analysts had expected, with adjusted earnings of $3.32 per share also topping estimates.
The headline number driving the AI narrative was artificial intelligence semiconductor revenue, which jumped 221% year over year to $16.7 billion. But Broadcom's guidance for the current quarter, roughly $34.8 billion, fell short of what the Street was looking for, and that gap took center stage over the AI beat. CEO Hock Tan used the earnings call to lay out a longer-term road map, telling investors AI semiconductor revenue is on track to roughly double in both fiscal 2027 and fiscal 2028, with one estimate putting the figures at $115B and $230B for those years, respectively. Tan also detailed financing arrangements with Anthropic and OpenAI, describing the two AI labs as "two geniuses in the middle of Mongolia" that need outside capital to keep building out compute.
Wall Street's response to the print has been anything but unified. RBC said the fiscal 2027 guidance met expectations while the 2028 target sets a high bar, and Truist argued the plan to double AI revenue next fiscal year is actually conservative. Macquarie went further, upgrading the stock and pointing to Broadcom's exposure to Anthropic's compute buildout as a reason the risk from Google's move to bring chip production in-house has largely already played out. Even so, the stock remains well off its 52-week high of $495.00, though still above its 52-week low of $289.96, and it enters the session up 3.28% over the last five trading days despite a 2.89% decline over the past 30.
The divide between the AI growth numbers and the market's tepid reaction leaves an open question heading into Broadcom's next report in December: whether the current guidance proves conservative, as some analysts argue, or whether the gap to Wall Street's highest expectations signals genuine risk in a business that investors had priced for flawless execution.