Broadcom announced its financial results for the third quarter, surpassing analysts’ expectations, and provided positive guidance for the current quarter. The company’s shares rose more than 4.5% in after-hours trading following the announcement of receiving $10 billion in purchase orders from a new customer for custom computer chips.

The company’s results compared to LSEG analysts’ expectations were as follows:

• Earnings per share: $1.69 (adjusted) vs. $1.65 expected.
• Revenue: $15.96 billion vs. $15.83 billion expected.

Broadcom forecasted revenues of up to $17.4 billion for the fourth quarter, exceeding Wall Street analysts’ expectations of $17.02 billion. Revenue growth in Q3 was 22% year-over-year.

The company posted a net profit of $4.14 billion, or 85 cents per share, compared to a net loss of $1.88 billion, or 40 cents per share, in the same period last year. Last year’s loss was due to a one-time $4.5 billion tax charge related to transferring the company’s intellectual property to the United States.

Broadcom develops custom computer chips for Google and other companies in cloud computing, as well as networking components and software needed to operate thousands of AI chips.

Investors are optimistic that the company’s custom processors could challenge Nvidia’s dominant market share in AI chips in the coming years. In March, Broadcom CEO Hock Tan stated the company is developing new AI chips with three major cloud computing customers, expecting continued AI market growth next year.

Tan told analysts in a conference call that Broadcom received $10 billion in purchase orders for custom AI chips (XPUs) from a new customer.

He added, “One of these potential customers has placed production orders with Broadcom, and we consider them a qualified XPU chip customer.” He said this large order boosted Broadcom’s AI revenue outlook for next year.

Tan said, “We expect to see significant sales growth starting in 2026.”

Tan attributed the company’s Q3 revenue growth to custom AI accelerators, networking components, and VMware software. AI segment revenue rose 63% during this period to $5.2 billion, exceeding the company’s previous guidance of $5.1 billion.

He indicated that AI segment revenue is expected to reach $6.2 billion this quarter.

The company stated that its chip sales, classified under semiconductor solutions, increased by 57% to $9.17 billion. Revenue from Broadcom’s infrastructure software segment, which includes VMware, rose 43% to $6.79 billion.