AVGO: the quarter Broadcom just reported, and what we do with it
We have no open hypothesis on Broadcom. The morning note named this report as the day's event, so this is a read of the print, not a checkpoint score.
The print. Revenue was $29.6 billion for the fiscal third quarter ended August 2, 2026, up 86 percent from the prior year [1]. GAAP diluted EPS was $2.68 and non-GAAP diluted EPS was $3.32 [1]. AI semiconductor revenue was $16.7 billion in the quarter, and the company expects it to reach $21.7 billion in Q4, which it says is up 236 percent year over year [2]. Total Q4 revenue guidance is approximately $34.8 billion, up 93 percent, with non-GAAP operating margin guided at about 66 percent of revenue, flat from a year ago [3].
The cash. Operations generated $14.2 billion in the quarter against $0.5 billion of capital spending, leaving $13.7 billion of free cash flow, 46 percent of revenue [4]. Cash ended at $24.0 billion, up from $19.6 billion a quarter earlier [4]. The dividend stays at $0.65 per share, payable September 30 [5].
The tape. On September 2, 28.58 million shares traded against a 20-day average of 19.75 million [6]. In the options market, dealers' heaviest call position sits at the $380 strike and the heaviest put position at $350, with no sizeable prints in the last five days [6].
Our Read. This is a company whose custom AI chip business is now growing faster than the whole company, and management guided it higher again for next quarter. My reading, resting on the segment table and the guide: the semiconductor side, $20.8 billion of the $29.6 billion [7], is where the growth lives, and the January report is where we test whether the $21.7 billion AI guide was delivered. Observation until we build an entry case.
The call
Stance: observation
Level: The isolating trigger is the fiscal Q4 report showing whether the $21.7 billion AI semiconductor revenue guide was delivered.
Horizon: 2026-12-15
Checkpoint: Observation only: no open hypothesis on this name, so there is no dated checkpoint to score.
What closes the file: Broadcom's fiscal Q4 report shows AI semiconductor revenue materially below the $21.7 billion guided, or total revenue materially below the approximately $34.8 billion guided.
Receipts7
[1] 8-K EX-99.1, acc. 0001730168-26-000076, highlights: revenue $29,591M vs $15,952M (+86%), GAAP diluted EPS $2.68, non-GAAP $3.32. https://www.sec.gov/Archives/edgar/data/1730168/000173016826000076/avgo-08022026x8kxex99.htm
[2] Same exhibit, CEO quote: Q3 AI semiconductor revenue $16.7B; Q4 expected $21.7B, up 236% year over year.
[3] Same exhibit, Q4 outlook: revenue approximately $34.8B (+93%), non-GAAP operating income approximately 66% of projected revenue.
[4] Same exhibit, cash discussion and reconciliation: cash from operations $14,197M, capex $532M, free cash flow $13,665M (46% of revenue); cash $23,975M vs $19,628M prior quarter.
[5] Same exhibit, Quarterly Dividends: $0.65 per share, payable September 30, 2026, record date September 21, 2026.
[6] Trading activity, 2026-09-02: 28.58 million shares traded against a 19.75 million 20-day average; call wall $380.00, put wall $350.00, no sizeable options prints in the last 5 days.
[7] Same exhibit, net revenue by segment: semiconductor solutions $20,839M of $29,591M total.