Broadcom Inc. Shatters Records with Exceptional Q3 2026 Performance
Broadcom Inc. has announced exceptional third-quarter fiscal year 2026 financial results, exceeding prior records in revenue, operating income, and free cash flow. The company's Q3 AI semiconductor revenue grew a staggering 221% year-on-year and 54% sequentially, driving consolidated revenue to $29.6 billion, up 86% from the same period last year.
According to Hock Tan, President and CEO of Broadcom Inc., the company delivered an exceptional quarter with operating income growing even faster at 92% year-on-year, resulting in a record operating margin of 68% of revenue. The strong performance was attributed to the adoption of custom accelerators by XPU customers, which more than tripled AI semiconductor revenue year-over-year to $16.7 billion.
Demand for Broadcom's products was particularly hot during Q3, with six XPU customers accelerating the adoption of custom accelerators and AI semiconductor revenue more than tripling year-on-year. The company delivered Ironwood TPU v7 in high volume to both Anthropic and Google and began production shipments of the next-generation TPU v8i for Google.
The new TPU generation has been designed with increased memory and bandwidth compared to Ironwood, making it optimized for inference workloads and comparable in performance to the Vera Rubin GPU. Additionally, Broadcom shipped Jalapeño, OpenAI's first-generation custom accelerator, which outperforms the Grace Blackwell GPU for inference workloads.
Our XPU shipments for the third quarter were up over 3.5 times year-on-year and represented 73% of AI revenue during the quarter. Our AI networking revenue was up over 2.5 times year-on-year, further solidifying Broadcom's position in the market.
The company expects to accelerate shipments of Ironwood to Anthropic and ramp up high-volume shipments of the TPU v8i to Google in Q4. Shipments of Jalapeño for OpenAI will continue, and Meta is expected to receive production shipments of their custom MTIA accelerator optimized for inference and recommendation at scale.
Based on this guidance, Broadcom expects its fiscal 2026 AI revenue to be $58 billion for the year, up 186% from last year and above prior guidance. The company believes that exponential growth in demand from XPU customers will continue into next year and beyond, driven by their need for compute infrastructure to support state-of-the-art frontier models.
Broadcom's engagement with Google has never been stronger, with a long-term agreement to develop and supply future generations of TPUs and AI networking. The company plans to deliver multi-tens of billions of dollars of TPUs annually over the next several years, further solidifying its position in the market.
Overall, Broadcom's exceptional Q3 performance is a testament to the company's leadership in the AI semiconductor market and its ability to deliver innovative solutions that meet the needs of its customers.
