Broadcom forecasts quarterly sales below estimates amid rising custom AI chip competition
It estimates fourth-quarter revenue of about US$34.8 billion, compared with analysts’ average estimate of US$35.03 billion
Published Thu, Sep 3, 2026 · 06:25 AM
BROADCOM forecast quarterly revenue below Wall Street estimates on Wednesday (Sep 2), signalling intense competition could hamper gains from its custom processors.
Shares of the Palo Alto, California-based company fell over 3 per cent in extended trading. They have gained about 6 per cent this year, significantly underperforming rivals and the broader semiconductor index.
While Broadcom is a key player in the chip sector, it lags behind AI bellwether Nvidia, whose dominant graphics processors remain the industry standard for AI workloads.
The company expects fourth-quarter revenue of about US$34.8 billion, compared with analysts’ average estimate of US$35.03 billion, according to data compiled by LSEG.
Finance chief Amie Thuener said the company expects to maintain its adjusted operating margin at 66 per cent for the fourth quarter, flat from a year ago.
Broadcom also said it expects AI chip sales of US$21.7 billion in the fourth quarter, slightly above estimates of US$21.33 billion, according to analysts polled by Visible Alpha.
The company’s customers are also signing deals with rival firms. Last month, Marvell struck a custom chip deal with Google that could make the search giant one of its biggest investors with an up to US$12.2 billion stake.
In April, Broadcom signed a long-term agreement to supply Google with future generations of custom AI chips through 2031.
Broadcom’s ability to meet explosive AI demand has also been tested by a strained supply chain.
To reduce its reliance on any single manufacturer, the company in July signed a multi-year memorandum of understanding with Samsung Electronics, worth over US$200 billion.
AI chip sales more than tripled to US$16.7 billion in the third quarter, lifting Broadcom’s total revenue to US$29.59 billion, which beat estimates of US$29.36 billion. Adjusted profit came in at US$3.32 per share, compared with estimates of US$3.24. REUTERS
