I'm LongbridgeAI, I can summarize articles.Broadcom is set to report Q3 earnings, with analysts expecting record revenue of $29.36 billion and EPS of $3.24. Following Nvidia's strong results, Broadcom faces pressure to demonstrate sustained AI growth. Key focus areas include semiconductor revenue from AI, VMware integration, and future guidance. Analysts are closely watching for margin health and whether the company can meet elevated expectations to drive stock performance.
Semiconductor giant Broadcom Inc (NASDAQ:AVGO) is one of the biggest earnings stories of the week with the company set to report third-quarter financial results Wednesday after market close.
Here are the earnings estimates, what experts are saying ahead of the report and the key items to watch.
Broadcom Q3 Earnings Estimates
Analysts expect Broadcom to report third-quarter revenue of $29.36 billion, up from $15.95 billion in last year’s third quarter, according to data from Benzinga Pro.
The company missed revenue estimates in the second quarter but has beaten estimates in eight of the last 10 quarters. Analysts are expecting another record quarter with the second quarter total of $22.19 billion the current quarterly revenue record total.
Analysts expect Broadcom to report third-quarter earnings per share of $3.24, up from $1.69 in last year’s third quarter.
The company has beaten analyst estimates for earnings per share in six straight quarters and in nine of the last 10 quarters.
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What Experts Are Saying
Broadcom’s earnings report comes after a strong double beat and impressive guidance from peer Nvidia Corporation (NASDAQ:NVDA).
Freedom Capital Markets Chief Market Strategist Jay Woods says that Broadcom tends to follow Nvidia.
"After Nvidia forecast roughly 70% revenue growth next fiscal year it puts added pressure on Broadcom," Woods said in a weekly newsletter. "Nvidia proved the AI party isn’t over. Now Broadcom has to prove it’s getting a bigger invitation."
Woods says investors should watch guidance to see if Broadcom keeps raising the bar.
"As expectations remain elevated, investors will want another strong outlook showing that AI growth carries into fiscal 2027 while margins remain healthy."
AI growth, VMware integration and recurring infrastructure-software growth are other areas Woods says to watch Wednesday.
Here are recent analyst ratings on Broadcom stock and their price targets:
- RBC Capital: Maintained Sector Perform rating, with price target of $400
- BMO Capital: Initiated with Outperform rating, with price target of $455
- Erste Group: Downgraded from Buy to Hold, with no price target
Key Items to Watch
After a mixed second quarter and record numbers from Nvidia recently, expectations for Broadcom could be among the highest they’ve been. This could make the stock incredibly volatile depending on which direction the stock heads.
Several large ETFs will be on watch, with Broadcom a key component.
Broadcom is the sixth largest stock in the SPDR S&P 500 ETF Trust (NYSE:SPY) at 2.65%. The stock is also the 10th largest holding in the Invesco QQQ Trust (NASDAQ:QQQ) at 2.80%. Broadcom is also among the largest holding in many technology and semiconductor sector funds.
Semiconductor revenue from AI will be a key in Wednesday’ report. That figure grew 143% year-over-year to $10.8 billion in the second quarter, above company expectations. In the third quarter, the company expects that figure to grow 200% year-over-year to $16 billion.
Failure to hit that number could be a big negative for the stock, while exceeding could be a catalyst to take shares higher.