Broadcom reports fiscal third-quarter earnings after the market close on Wednesday, and analysts say the stock's rally depends on how much detail management gives on its AI revenue outlook. J.P. Morgan's Harlan Sur argues fears over Broadcom losing ground with Google are overstated, while Jefferies' Blayne Curtis sees limited room for AI estimates to climb further.
Broadcom's stock has gained just 6.7% in 2026, after rising more than sixfold over the previous three years. By comparison, the PHLX Semiconductor Index has climbed 60% this year. That gap has left investors waiting on Wednesday's report for signs the AI growth story is intact.
Why the stock has lagged
The underperformance is tied mostly to worries over Broadcom's potential share loss at Google, and to the lack of incremental color around the company's outlook for more than $100 billion in AI revenue in fiscal 2027. Sur said investors going into Wednesday's earnings call will likely focus on whether Broadcom sharpens that guidance and on how durable growth in its AI chip business looks heading into fiscal 2028.
Broadcom and Google have co-developed the search giant's custom chips for more than a decade. However, reports have suggested Google is looking at MediaTek and Advanced Micro Devices as design partners for future generations of those chips, and Marvell Technology said in August it had expanded its own partnership with Google on custom silicon. Sur called those moves reflective of Alphabet broadening its supplier base rather than a threat to Broadcom, and pointed to the companies' five-year agreement reached in April. In his view, fears about Broadcom's position are overstated.
Third-quarter estimates
Analysts tracked by FactSet expect Broadcom to report July-quarter revenue up 83% from a year ago to $29.2 billion, with adjusted earnings of $3.22 a share, up 90.3% year over year. The semiconductor-solutions segment, which spans AI and non-AI chips, is projected to grow 121.3% to $20.3 billion for the quarter.
That growth is expected to accelerate further in the fiscal fourth quarter, with semiconductor-solutions revenue seen jumping 131.4% to $25.6 billion and total revenue reaching $34.7 billion, according to FactSet estimates. Adjusted earnings per share for the October quarter are expected to rise 97.2% to $3.85.
A cautious view on 2027, upside seen later
Jefferies analyst Blayne Curtis sees limited room for Broadcom's AI revenue estimates to move higher in fiscal 2027, given expectations already sit between $130 billion and $140 billion. According to MarketWatch, Curtis said: "We just don't think there is much more additional supply to be meaningfully above that." Like Sur, Curtis expects Broadcom to stay the dominant supplier of Google's TPUs, though he said reports of rising competition are hard to disprove.
Curtis instead sees upside emerging in 2028 from Broadcom's AI XPV Platform, which targets deploying more than 20 gigawatts of custom chips and networking for AI frontier labs including Anthropic and OpenAI. With memory prices rising and compute still constrained, he said it is too early for management to frame that opportunity.
Source: MarketWatch
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