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OI
Obyčejný investor
@obycejnyinvestor · 3d

📊 BROADCOM – Q3 FY2026 RESULTS

Broadcom reported another very strong quarter, and the AI business continues to gain momentum. 🚀

🟢 Adjusted EPS: $3.32 Expected: $3.22

➡️ BEAT by $0.10 / +3.1% ➡️ +96% YoY

🟠 Revenue: $29.59 billion Expected: $29.24 billion

➡️ BEAT by $350 million / +1.2% ➡️ +86% YoY

🟢 AI semiconductor revenue: $16.7 billion Previous guidance: $16.0 billion

➡️ $700 million / +4.4% above guidance ➡️ +221% YoY 🔥

🟢 Semiconductor Solutions: $20.84 billion ➡️ +127% YoY

🟢 Infrastructure Software: $8.75 billion ➡️ +29% YoY

🟢 Free Cash Flow: $13.67 billion ➡️ +95% YoY ➡️ FCF margin approximately 46% 💰

🔮 Q4 FY2026 GUIDANCE

🟠 Revenue: ~$34.8 billion Expected: ~$34.68 billion ➡️ BEAT by approximately $120 million / +0.35% ➡️ +93% YoY

🟢 AI semiconductor revenue: $21.7 billion ➡️ +236% YoY 🚀 ➡️ vs Q3 growth approximately +30% QoQ

🔥 The most important thing, in my opinion, is again AI.

Broadcom made $10.8 billion from AI semiconductors in Q2, $16.7 billion in Q3, and expects as much as $21.7 billion in Q4.

➡️ Q2 → Q3: +55% QoQ ➡️ Q3 → Q4 guidance: +30% QoQ

At this business size, this is an absolutely brutal growth rate. 🤯

Management also says that demand for custom AI accelerators and networking remains very strong.

In addition, Broadcom expects approximately $115 billion in AI semiconductor revenue in FY2027 and around $230 billion in FY2028. 🚀

💭 In my view, very strong results.

EPS beat expectations, revenue came in above consensus, and above all, AI semiconductor revenue exceeded Broadcom's previous guidance by $700 million.

The Q4 total revenue outlook is 🟠 practically in line with expectations / slightly above, but AI continues to show tremendous acceleration.

So, in my opinion, Broadcom continues to confirm its position as one of the biggest winners of the current AI boom. 🔥

And what about the fair value of the stock?

Wall Street analysts expect growth up to $520 per share in the next 12 months!

And according to our DCF model, the current fair value of the stock is up to $452.2.

Do you have Broadcom in your portfolio? 👇 $AVGO

A community member's personal view, not investment advice. Community Guidelines

VS
Vojtěch Šplíchal @vojtechsplichal 2d

Thanks for the interesting perspective!

I'd be more interested in what specific assumptions you entered into your DCF model—mainly expected revenue and FCF growth, margin development, and WACC.

In a DCF, these inputs make the biggest difference in the resulting fair value, in my opinion. Thanks for any clarification.

Personally, I got a fair value somewhat lower, just under $410, because I used more conservative FCF growth, gradual margin improvement, WACC around 9%, and terminal growth of 3%.

OI
Obyčejný investor @obycejnyinvestor 1d

Hi, I had WACC around 8-8.5% 😊

MS
Martin Sedláček @martinsedlacek 2d

I don't hold $AVGO in my portfolio, but I do hold $MRVL, which has similar exposure to custom AI silicon and data centers. I'm mainly curious about the further development of Marvell's partnership with Google. But Broadcom is without a doubt a very high-quality company at an attractive price.

OI
Obyčejný investor @obycejnyinvestor 1d

Hello, I'm also very interested in Marvell, the potential there is huge. 🙏 At what prices are you holding MRVL?

KJ
Kryštof Jáně @krystofjane 2d

Time to buy? The stock is relatively low from its ATH.

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