Broadcom (AVGO) reported revenue of $29.59B for the third quarter of fiscal 2026 (ended Aug. 2, 2026), up 85.5% from the year-ago quarter and ahead of the analyst estimate of $29.24B. Operating margin reached 54.3%, the highest in the last five quarters, and free cash flow was $13.66B. Even so, the shares traded at $321.68 on Oct. 23, 2026, well under the 52-week high of $495, so the question for investors is how much of this growth is already priced in.
Key facts
- Results date: Broadcom reported on Sept. 2, 2026 for the quarter ended Aug. 2, 2026. The 10-Q filing followed on Sept. 10, 2026.
- Revenue: $29.59B in the quarter, against an analyst estimate of $29.24B (a beat of $350.1M) and $15.95B in the quarter ended Aug. 3, 2025.
- Earnings per share (EPS): The reported figure was 3.32 against an estimate of 3.22, a beat of $0.10. Diluted EPS under standard accounting rules was 2.68, versus 0.85 a year earlier. The two numbers measure profit differently, so don't compare them directly.
- Cash: Free cash flow (cash from operations minus capital spending) was $13.66B in the quarter.
- Stock: $321.68 on Oct. 23, 2026, down 0.48% on the latest quote. The 52-week range is $289.96 to $495.
- Next report: Dec. 9, 2026. Analysts expect EPS of 3.82 and revenue of $34.90B.
What happened
Broadcom's revenue and profit were much higher than a year earlier. Net income rose 216.1% from the year-ago quarter to $13.09B. Profit grew faster than sales because Broadcom kept more of each dollar after costs. Operating margin, the share of revenue left after running the business, rose from 36.9% a year earlier to 54.3%.
The segment data shows where the growth came from. Semiconductor Solutions, the chip business, brought in $20.84B, against $9.17B a year earlier. Infrastructure Software brought in $8.75B, against $6.79B. Both grew, but the chip business drove most of the increase. The headlines around the stock point to demand for AI computing as the context, though we did not have a call transcript for this article, so we are not attributing specific drivers or quotes to management.
By geography, Asia Pacific brought in $20.94B in the quarter, the Americas $5.51B and EMEA (Europe, Middle East and Africa) $3.13B. Revenue is concentrated in Asia Pacific.
The five-quarter trend
The quarter fits a steady climb rather than a one-off jump.
| Quarter (ended) | Revenue | Gross margin | Operating margin | Net income | |---|---|---|---|---| | Aug. 3, 2025 | $15.95B | 67.1% | 36.9% | $4.14B | | Nov. 2, 2025 | $18.02B | 68.0% | 41.7% | $8.52B | | Feb. 1, 2026 | $19.31B | 68.1% | 44.9% | $7.35B | | May 3, 2026 | $22.19B | 69.5% | 48.9% | $9.31B | | Aug. 2, 2026 | $29.59B | 69.1% | 54.3% | $13.09B |
Revenue rose every quarter, and operating margin rose every quarter. Gross margin, which counts only the direct cost of making products, slipped slightly in the latest quarter from its high in the quarter ended May 3, 2026. The gain in operating margin therefore came from spreading operating expenses over a much larger revenue base, not from cheaper production. Net income was $8.52B in the quarter ended Nov. 2, 2025 and $7.35B in the next quarter.
Cash flow followed the same path. Free cash flow was $7.02B in the quarter ended Aug. 3, 2025 and $13.66B in the latest quarter. Capital spending stayed small, $532.0M in the latest quarter.
Why it matters for investors
Cash and shareholder returns. Broadcom paid $3.10B in dividends in the latest quarter and bought back no stock. In the quarter ended Feb. 1, 2026 it spent $7.85B on buybacks, and $600.0M in the quarter ended May 3, 2026. The dividend yield is 0.8%, so this is mainly a growth story, not an income one.
Balance sheet. At Aug. 2, 2026, Broadcom held $23.98B in cash and short-term investments against $59.42B of total debt, so net debt was $35.44B. Shareholders' equity was $99.69B and debt/equity is 0.60. Financial strength scores are solid: a Piotroski score of 8 (on a 0 to 9 scale of financial health) and an Altman Z of 12.02 (a bankruptcy-risk gauge where higher is safer).
Valuation versus peers. On trailing 12-month figures, Broadcom trades at a price-to-earnings (P/E) ratio of 39.91, price-to-sales of 17.23 and price-to-free-cash-flow of 38.97. Its net margin is 42.9%. For comparison:
| Company | P/E | Net margin | Market cap | |---|---|---|---| | Broadcom (AVGO) | 39.91 | 42.9% | $1.54T | | Analog Devices (ADI) | 46.17 | 29.8% | $189.50B | | Marvell Technology (MRVL) | 74.94 | 27.9% | $200.12B | | Monolithic Power Systems (MPWR) | 69.52 | 24.4% | $56.03B | | Lattice Semiconductor (LSCC) | 363.67 | 5.6% | $13.66B |
Broadcom has a lower P/E and a higher net margin than each of these four peers. Those peers are smaller and differ in business mix, so the comparison is a rough guide only.
Analyst view. Of 60 ratings, 54 are buy, 6 are hold and none are sell, giving a consensus of "Buy." Analysts' price targets average $514.37 with a median of $520.00, a high of $600.00 and a low of $350.00. These are analysts' views, not ours. All of those targets, including the lowest, are above the $321.68 quote of Oct. 23. FMP's own discounted cash flow model, which values a company by projecting its future cash flows, produces $177.13 per share as of Oct. 25, 2026. That is a model estimate, and such models are very sensitive to their assumptions. It sits far from the analyst targets, which shows how widely the range of opinions runs.
Stock Expert AI MoonshotScore. Our MoonshotScore V2 for Broadcom is 83.9, rated Exceptional. The pillars, each measured against the sector, show where the strength lies:
- Growth: 93. Very strong, reflecting the revenue and profit expansion above.
- Quality: 92. Very strong, reflecting high margins and cash generation.
- Safety: 76. Good, though lower than the growth and quality pillars.
- Momentum: 48. Middling. The shares are well off their 52-week high.
- Valuation: 30. Weak relative to the sector, meaning the price already asks a lot of future growth.
What could go wrong
- Expectations are high. Analysts' estimates for the period ending May 2, 2028 call for revenue of $65.28B and EPS of 7.02, and for the period ending Aug. 2, 2028 for revenue of $74.23B and EPS of 7.94. The ranges around these figures run from $61.61B to $67.50B and from $70.06B to $76.76B respectively. If growth slows, the valuation leaves less room for error.
- Concentration. Most revenue comes from one segment and one region, Semiconductor Solutions and Asia Pacific. A slowdown in customer spending on AI hardware would hit Broadcom harder than a more diversified company.
- Debt. Total debt of $59.42B is manageable against current cash flow but is a fixed cost if growth stalls.
- Insider selling. Among the 30 most recent insider filings (Form 4), those dated in the last 90 days show 0 open-market purchases and 16 sales. Insider sales are often routine, such as selling shares granted as pay, so this is a data point, not a verdict. Older filings in the window may be missing.
- Share price. The stock was quoted at $321.68, compared with a 52-week high of $495.
What to watch next
- Dec. 9, 2026: the next earnings report. The consensus is EPS of 3.82 and revenue of $34.90B. Check whether revenue and operating margin keep rising.
- Gross margin: it dipped slightly in the latest quarter. A further decline would suggest the product mix is changing.
- Capital returns: whether buybacks resume after none in the latest quarter, and how debt changes.
- Segment mix: whether Infrastructure Software keeps growing while chips lead.
- Analyst estimate changes: upward revisions would support the current price targets; cuts would signal the opposite.
Frequently asked questions
Q: Did Broadcom beat earnings estimates in its latest quarter?
Yes. For the quarter ended Aug. 2, 2026, reported on Sept. 2, 2026, Broadcom posted EPS of 3.32 against an estimate of 3.22, and revenue of $29.59B against an estimate of $29.24B.
Q: How fast is Broadcom growing?
Revenue in the quarter ended Aug. 2, 2026 was 85.5% higher than in the quarter ended Aug. 3, 2025, and net income was 216.1% higher. Semiconductor Solutions, the chip segment, generated $20.84B of the $29.59B total, against $9.17B a year earlier.
Q: Is Broadcom stock expensive?
That depends on how long strong growth lasts. Its trailing P/E is 39.91, lower than ADI, MRVL, MPWR and LSCC. Our MoonshotScore valuation pillar is only 30, so it scores weakly on valuation. Analysts' average price target is $514.37, while the stock was quoted at $321.68 on Oct. 23, 2026. This is information, not investment advice.
This is educational content, not investment advice. Past performance does not guarantee future results.