Hello,

Welcome to our flagship newsletter, MarketBeat Daily Ratings.

We'll deliver the latest "Buy" and "Sell" ratings from Wall Street's top-rated analysts directly to your inbox each morning.

But first, we need you to do two quick things:

1. Hit reply, and send a simple "Yes." Just one word. This tells Google (and other emails providers) that you actually want to get our newsletter.

2. After that, this link to confirm your subscription. That will tell us that you received our welcome email and that we should start sending your daily report. 

Confirm your subscription here.

After you have completed these two steps, we would like to gift you a free copy of one of our most popular investing reports: 7 Stocks to Buy and Hold Forever. You can download the report with this link.

Thank you again for subscribing. We look forward to being an important part of your investing journey

Matthew Paulson
Founder and CEO, MarketBeat.

P.S. If you didn’t intend to subscribe, no problem—you can unsubscribe with this link.

(ARReply-161)

The Path to $230 Billion: Broadcom Outlines the Next Phase of Its AI Growth Story

Written by Leo Miller. First Published: 9/3/2026.

Broadcom's (NASDAQ: AVGO) latest earnings report was among the most revealing the company has posted in recent quarters.

Another quarter of explosive AI sales growth stood out, but the quarter itself was far from the biggest story.

Small Colorado Company (Backed by Sam Altman) Could Save U.S. Power Grid (Ad)

A small Colorado company has secured rights to technology that could prevent the U.S. public power grid from collapsing — and billionaire Sam Altman is now an investor.

This under-the-radar firm is drawing serious attention from those watching the energy infrastructure space closely.

Click here to learn this company's name for free today

Management also provided key statistics and insights that give investors a much more complete understanding of the dramatic growth ahead.

The most important takeaway came later, when management outlined how much AI semiconductor demand it believes it can serve over the next two fiscal years.

Broadcom Beats, but Next-Quarter Guidance Falls Short

Broadcom released its financial results approximately an hour before its earnings call began. The headline numbers alone elicited a negative market reaction, with Broadcom shares falling as much as 5% in after-hours trading.

Broadcom posted sales of $29.6 billion, an 86% increase year over year (YOY). This slightly exceeded analyst estimates of $29.43 billion. The company's earnings per share came in at $3.32, a 96% YOY increase, beating estimates of $3.22.

The likely cause of Broadcom's post-earnings decline was its guidance for the next quarter. Broadcom said it expects to generate sales of $34.8 billion, slightly below estimates of $35 billion.

Still, Broadcom solidly surpassed its own guidance for AI semiconductor sales of $16 billion. The company generated segment revenue of $16.7 billion, up 221% YOY. For the next quarter, the company expects even more astonishing growth, guiding for $21.7 billion in sales, or a 236% YOY increase. In light of these results, Broadcom increased its full-year AI semiconductor sales guidance to $58 billion, up from $56 billion. However, this figure still pales in comparison with what Broadcom expects in the years ahead.

Broadcom Provides Long-Awaited AI Semiconductor Sales Guidance

The tide began to turn as CEO Hock Tan gave his presentation. Management gave investors the clarity they sought, offering concrete AI guidance not only for fiscal year 2027 (FY2027) but also for FY2028.

For FY2027, the company said it had secured enough supply to generate $115 billion in annual AI semiconductor revenue. This figure implies nearly double its AI semiconductor revenue and represents a notable increase from the company's previous guidance of “more than $100 billion.”

Importantly, Tan said directly that Broadcom's AI demand exceeds what this outlook implies, meaning supply is limiting growth. In this context, it makes sense why Broadcom did not previously raise its AI semiconductor guidance. The company was likely unsure how much supply of key components it would be able to secure and, consequently, how many chips it could deliver to customers. One of the most likely supply constraints Broadcom is facing is high-bandwidth memory (HBM), which remains in tight supply.

The company said it would work to secure more supply, implying upside to its forecast if successful. Meanwhile, Broadcom expects AI semiconductor sales to double again in FY2028, reaching $230 billion. This figure alone, excluding Broadcom's non-AI semiconductor and software businesses, is 3.6 times as high as the company's total revenue in fiscal year 2025.

These comments quickly shifted the market's interpretation of Broadcom's results. Within minutes, the stock moved from down 3% to up 3%.

Frontier Labs Set to Supplant Alphabet as Broadcom's Top AI Customer

Broadcom shed considerable light on its relationships with six XPU customers, providing several important statements on this front. First, the company noted that its engagement with Alphabet (NASDAQ: GOOGL) has “never been stronger.” This came even as the company specifically said MediaTek (OTCMKTS: MDTKF) was developing Alphabet's Tensor Processing Unit (TPU) v8t, substantiating recent rumors.

On the other hand, Broadcom is responsible for the TPU v8i. The v8i is the next-generation, inference-specific variant of the TPU 8. This is particularly positive, as analysts expect inference workloads to increasingly grow their share of AI workloads compared with training workloads. Overall, Broadcom says it intends to “deliver multi tens of billions of dollars of TPUs annually” to Alphabet. These comments somewhat mitigate concerns that Broadcom is losing share within Alphabet's TPU program.

Additionally, even if the company is losing share at Alphabet, the negative impact is likely to lessen over the coming years. Broadcom noted that Anthropic is on track to become its largest XPU customer, while OpenAI is on track to become its second-largest XPU customer. This would presumably move Alphabet down to its third-largest customer over time after holding the top spot for years. In turn, Broadcom should be less reliant on maintaining a massive share of Alphabet's TPU program.

Broadcom's AI Growth Story Is Just Getting Started

All in all, Broadcom shares were down slightly at the conclusion of after-hours trading. The stock likely would have received a meaningfully positive boost if its FY2027 AI semiconductor guidance had been higher, as the figure was somewhat underwhelming. However, supply constraints are a reasonable explanation for why Broadcom chose the figure it did.

Nonetheless, Broadcom continues to forecast massive AI growth over multiple years. With $230 billion in AI chip sales expected in FY2028, the company supports a healthy long-term outlook for the stock.