Broadcom shares flat ahead of Q3 earnings: Here's what Wall Street expects from the chipmaker

Shares of heavyweight chipmaker Broadcom Inc (Nasdaq: AVGO) remained flat on Wednesday, 2 September, hovering around $370 apiece as investors awaited the company's third-quarter fiscal results.

Broadcom investors are expecting a blowout earnings report after Nvidia Corp last week beat Wall Street estimates and forecast a whopping 70% jump in revenue for its next fiscal year. It was a rare disclosure for the AI bellwether, which typically does not issue such projections.

Nvidia's strong outlook has therefore raised expectations for Broadcom's upcoming results, particularly given the company's exposure to the AI semiconductor market.

What Wall Street analysts expect from Broadcom's Q3 results

Wall Street analysts expect Broadcom to report a 210% jump in fiscal third-quarter earnings per share to $2.63, along with an 85% rise in revenue to $29.4 billion. The results come at the end of a mixed earnings season for key players in the AI trade, making Broadcom's outlook particularly important for investors assessing the sustainability of the sector's growth.

While hyperscalers still plan to spend hundreds of billions of dollars on infrastructure, supply remains limited, and investors are increasingly concerned about returns on investment. This has raised the importance of Broadcom's commentary on demand and future spending plans.

Beyond Broadcom's financial performance, investors will also be listening for updates about its customers, especially following Apple Inc's July announcement that Broadcom will provide new custom chips to the iPhone maker as part of an expanded partnership worth more than $30 billion.

The agreement is in addition to long-term deals with companies such as Alphabet Inc's Google, Anthropic PBC, OpenAI, and Meta Platforms Inc, further highlighting Broadcom's exposure to the growing demand for custom AI chips.

Can Broadcom maintain its margins?

At the same time, shareholders will be looking for assurances that chip demand isn't being created through circular financing deals and that Broadcom isn't losing market share in the custom-chip segment to competitors such as Alphabet and Marvell Technology Inc.

Gross margins, which are under pressure across the chip industry due to high memory costs, will be another key focus for investors. The health of Broadcom's infrastructure software division will also be closely watched as investors assess the company's broader growth outlook.

Will Broadcom's results reverse the recent stock weakness?

The results come at a time when Broadcom's stock has been under pressure over the past month, with shares last week falling to levels not seen since April 2026. The upcoming earnings will therefore be closely watched to determine whether the company's AI-driven growth can revive investor confidence and reverse the recent weakness in the stock.

The recent weakness followed Broadcom's fiscal second-quarter earnings announcement on 4 June, after which the stock came under heavy selling pressure and settled 13% lower. It marked the stock's worst post-earnings performance since at least 2009 and came a day after shares touched a fresh all-time high of $495.

Broadcom's stock is down 23% since its record close on 2 June, putting it among the 30 worst performers in the S&P 500 Index over that stretch and erasing much of its more than 30% rise through the first five months of the year.

In its fiscal 2026 second quarter (ended 3 May), it generated revenue that grew 48% year over year to $22.2 billion, while its adjusted earnings per share (EPS) surged 54% to $2.44. AI semiconductor sales stole the spotlight, growing 143% to $10.8 billion, accounting for nearly half of the company's revenue. The company kept its AI revenue expectations for fiscal 2026 and 2027 unchanged.

(With inputs from Bloomberg)

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