AVGO 3QFY26 First Take: revenue and GPM were broadly in line with the Street. Growth was driven by AI. Ex-amortization and restructuring, underlying GPM was 74%, down 200bps QoQ.

Medium to long term, a rising mix of lower-margin ASICs will pressure overall GPM. Margins could trend down as ASIC contribution increases.

AI, the key focus: AI revenue was $16.7bn this quarter, up $5.9bn QoQ. The company guides next quarter AI revenue to $21.7bn, up $5.0bn QoQ and slightly ahead of consensus (~$21.5bn).

On the call, management raised AI guidance to $58bn for this fiscal year (from $56bn) and $115bn+ for next fiscal year (FY27; from $100bn). It also offered an FY28 outlook of $230bn, implying 20GW.

As most major houses model FY27 AI revenue at ~$130–150bn, the $115bn outlook still looks tame. For FY28’s 20GW (~$230bn) outlook, about 10GW is tied to Anthropic; with Anthropic ARR growth decelerating, the market is likely to apply a haircut. For more details, follow Dolphin Research’s subsequent take and Trans. $Broadcom(AVGO.US)