Why Broadcom Stock Dropped Today

Key Points Broadcom beat on sales and beat on earnings last night. Investors are upset with Broadcom's guidance, however, which forecasts a Q4 sales miss. 10 stocks we like better than Broadcom › Broadcom (NASDAQ: AVGO) stock -- which really needs to get around to updating its ticker symbol one of these days -- tumbled 6.3% through 10:30 a.m. ET Thursday despite beating on earnings last night. Heading into the company's fiscal Q3 2026 report, analysts forecast Broadcom would earn $3.21 per share ( non-GAAP ) on $29.2 billion in sales. In fact, Broadcom earned $3.32 per share on $29.6 billion in sales. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » It might not have been a blowout, but it certainly was a beat, so why aren't investors more impressed? Image source: Getty Images. Broadcom Q3 earnings After all, Broadcom grew its sales 86% year over year in Q3. GAAP profits weren't quite as strong as non-GAAP, but calculated under generally accepted accounting principles ( GAAP ), earnings per share still more than tripled to $2.68, and free cash flow zoomed 34% higher to $13.7 billion! All things considered, it was a terrific quarter. What comes next for Broadcom stock The question investors are asking, though, is whether Broadcom can keep this up? Turning to guidance , Broadcom CEO Hock Tan confirmed "demand for our custom AI accelerators and networking continues to be very strong" and "the momentum continues" as we enter Q4, with AI semiconductor revenue expected to triple again to $21.7 billion. Assuming this happens, Broadcom might reach $34.8 billion in Q4 sales, with AI accounting for 62% of the total. Problem is, as good as this sounds, Wall Street was expecting Broadcom to predict more than $35 billion. When Broadcom failed to do that, they basically marred their Q3 earnings beat with a Q4 guidance miss -- and that's what's upsetting investors today. Personally, I think selling Broadcom stock is a bad call. With a 61x price-to-earnings ratio and projected 60% annual growth over the next five years, the stock looks fairly priced to me. Should you buy stock in Broadcom right now? Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Broadcom wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $446,157 !* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,377,357 !* Now, it’s worth noting Stock Advisor’s total average return is 984 % — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 3, 2026. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom. The Motley Fool has a disclosure policy .

Investors are upset with Broadcom's guidance, however, which forecasts a Q4 sales miss.

Broadcom (NASDAQ: AVGO) stock -- which really needs to get around to updating its ticker symbol one of these days -- tumbled 6.3% through 10:30 a.m. ET Thursday despite beating on earnings last night.

Heading into the company's fiscal Q3 2026 report, analysts forecast Broadcom would earn $3.21 per share ( non-GAAP ) on $29.2 billion in sales. In fact, Broadcom earned $3.32 per share on $29.6 billion in sales.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

It might not have been a blowout, but it certainly was a beat, so why aren't investors more impressed?

After all, Broadcom grew its sales 86% year over year in Q3. GAAP profits weren't quite as strong as non-GAAP, but calculated under generally accepted accounting principles ( GAAP ), earnings per share still more than tripled to $2.68, and free cash flow zoomed 34% higher to $13.7 billion!

The question investors are asking, though, is whether Broadcom can keep this up? Turning to guidance , Broadcom CEO Hock Tan confirmed "demand for our custom AI accelerators and networking continues to be very strong" and "the momentum continues" as we enter Q4, with AI semiconductor revenue expected to triple again to $21.7 billion.