Broadcom’s AI Semiconductor Sales More Than Triple as Custom Chip Business Accelerates

Broadcom Inc. (NASDAQ: AVGO) reported that revenue from its artificial intelligence semiconductor business reached $16.7 billion in its fiscal third quarter, a 221% increase compared with the same period a year earlier. The figures, disclosed in the company’s earnings release on Sept. 2, 2026, underscore how quickly demand for custom AI silicon has become the central driver of the company’s growth story.

The results highlight Broadcom’s position in one of the semiconductor industry’s fastest-moving segments. Unlike merchant chip vendors selling standardized processors, Broadcom designs custom accelerators and networking components tailored to the needs of large hyperscale customers building out AI data center infrastructure. That model ties the company’s AI revenue directly to the capital spending plans of a small number of major cloud operators, which has made its quarterly AI figures a closely watched barometer for the broader AI buildout.

Broadcom operates across two segments: Semiconductor Solutions, which spans networking connectivity and custom silicon, and Infrastructure Software, a portfolio that includes enterprise software assets. The company’s market capitalization stood at roughly $1.99 trillion, with shares changing hands at $361.99 in recent trading, up 0.71% from the previous close of $359.43.

The pace of the AI segment’s expansion stands out even against a backdrop of elevated expectations for AI-related chipmakers. A 221% year-over-year increase suggests that customers are not merely maintaining their AI infrastructure orders but substantially expanding them, particularly for the custom accelerator programs and networking gear that move data between clusters of AI processors.

For context on how the market has absorbed Broadcom’s run: an investor who put $1,000 into the stock on Sept. 8, 2025, would have seen that stake grow to approximately $1,070, including dividends, by the market close on Sept. 8, 2026 — a comparatively modest total return despite the explosive growth in the company’s AI revenue line over that stretch. The divergence between the share performance and the underlying AI business trajectory has been a recurring theme in coverage of the stock this year.

According to the company, shares currently trade at roughly 12 times management’s stated fiscal 2028 earnings target, a forward-looking measure that depends on the company meeting multi-year goals tied to continued AI demand.

What to watch

• Broadcom’s fiscal fourth-quarter earnings report, which will show whether triple-digit AI semiconductor growth persists into the next quarter.
• Updates from management on the fiscal 2028 earnings target referenced in the release.
• Any announcements regarding new or expanded custom accelerator programs with hyperscale customers.
• Capital expenditure commentary from major cloud providers, which shapes demand for Broadcom’s AI silicon and networking products.

Source: original release