Broadcom delivered record financial results for its third fiscal quarter, powered by surging demand for custom artificial intelligence silicon. While a softer quarterly forecast briefly triggered a stock drop, chief executive Hock Tan quickly reversed the slide by unveiling ambitious long term growth targets. The company now expects its AI chip business to double within 2 years.
Broadcom reported revenue of $29.591 billion for the quarter, marking an 86% jump over the previous year. That figure edged past Wall Street targets of $29.45 billion. Adjusted earnings came in at $3.32 per share, surging 96%. Sales of AI hardware reached $16.7 billion, up 221% from the previous year and accounting for 56% of total company revenue. Traditional semiconductor sales expanded at a much slower pace, highlighting how central custom silicon has become to the broader business.
Net income under standard accounting rules hit $130.88 billion, while non GAAP net income reached $163.72 billion. Free cash flow stood at $136.65 billion, which represents 46% of total revenue. Infrastructure software brought in $87.52 billion, up 29%. Semiconductor solutions formed the largest chunk of the business, generating $208.39 billion to easily beat analyst expectations.
The initial market reaction was volatile. Investors dumped shares after Broadcom projected upcoming quarterly revenue of $34.8 billion, falling slightly short of analyst forecasts of $35.05 billion. The stock dropped more than 6% in after hours trading. But the tone shifted as Hock Tan detailed massive internal projections during the conference call. He raised the full year AI revenue target from $56 billion to $58 billion, and shares climbed over 2% into positive territory.
Tan outlined an aggressive path for the coming years that caught Wall Street off guard. Broadcom targets $115 billion in AI chip revenue for the 2027 fiscal year, representing almost double its current baseline. By the 2028 fiscal year, the company expects that number to hit $230 billion, roughly 4 times the volume projected for this year. Tan also stated that earnings per share could exceed $30 by 2028, surpassing the analyst consensus of $26.42.
AI networking gear is projected to grow at the same pace as custom accelerator chips. That gives the company 2 distinct growth engines inside modern data centers as cloud providers upgrade their infrastructure. With AI products making up 80% of semiconductor solution sales, Broadcom is firmly positioned at the center of the hardware buildout.
