Lead: On Sept. 4, 2025, Broadcom reported fiscal Q3 results for the period ended Aug. 3 showing revenue of $15.95 billion and adjusted EPS of $1.69, and the stock jumped after CEO Hock Tan revealed the company had secured over $10 billion in custom AI orders tied to a newly disclosed fourth major customer.
Key Takeaways
- Broadcom posted fiscal Q3 revenue of $15.95 billion, up 22% year over year, beating the LSEG consensus of $15.83 billion.
- Adjusted EPS was $1.69, a 36% increase versus last year, above the $1.65 estimate.
- Adjusted EBITDA reached a record $10.7 billion, up 30% year over year and ahead of FactSet consensus.
- AI-related revenue grew 63% year over year to $5.2 billion; management guides roughly $6.22 billion for fiscal Q4.
- CEO Hock Tan said Broadcom secured over $10 billion of custom AI orders and noted backlog topped a record $110 billion.
- Shares rallied in after-hours trading after the call and after Tan said he will remain CEO at least through 2026; price target was raised to $350 from $290.
Verified Facts
Broadcom reported that consolidated fiscal Q3 adjusted EBITDA expanded to $10.7 billion, reflecting roughly 30% year‑over‑year growth, while consolidated gross margin widened by 99 basis points versus the year-ago quarter.
The Semiconductor Solutions segment generated $9.17 billion in revenue, up 26% year over year, with AI semiconductor revenue specifically at $5.2 billion, a 63% increase. Infrastructure Software (which includes VMware) produced about $6.79 billion in revenue, up approximately 17% year over year, with segment gross margin near 93%.
For fiscal Q4 (ending Nov. 2), Broadcom guided total revenue of about $17.4 billion, implying roughly 21% year‑over‑year growth, and expects adjusted EBITDA around 67% of revenue (about $11.658 billion).
Context & Impact
The after‑hours share move was driven less by headline numbers and more by management commentary on the conference call. Tan disclosed a fourth major AI customer without naming it, and said one previously known prospect released a production order expected to ship substantially beginning in 2026.
That commentary reshapes expectations for 2026 because management now anticipates materially stronger AI-related demand than previously modeled, prompting an upward revision to the price target to $350 while the recommendation remains a hold-equivalent position.
Broadcom’s combination of custom AI accelerators and high-performance networking silicon positions it as a core supplier for hyperscalers and large cloud customers; the VMware acquisition additionally bolsters the software and enterprise infrastructure revenue mix.
- Competitive set includes Marvell Technology, AMD and Nvidia in various product domains.
- Apple remains a key wireless customer; production timing around new iPhone launches typically lifts Wireless sales.
‘We secured over $10 billion of orders,’
Hock Tan, CEO, Broadcom (company earnings call)
Unconfirmed
- The Financial Times reported Broadcom may be working with OpenAI; Broadcom’s management did not name the fourth customer, so OpenAI as the newly revealed customer remains unconfirmed.
- Media reports and market commentary about the exact shipping cadence for the 2026 production order are based on management guidance but will require confirmation as shipments begin.
Bottom Line
Broadcom beat Q3 estimates and issued upbeat guidance driven by accelerating AI revenue and a large new set of custom orders; those factors increase upside potential into 2026 while operational execution and customer confidentiality still leave some open questions.
Investors should watch shipment confirmation for the newly disclosed orders, the pace of AI revenue growth in the coming quarters, and any further disclosure about the identity and scope of the new customer relationship.