Broadcom Flags Data Center Limits Despite AI Demand

Broadcom reported fiscal third-quarter results that beat Wall Street expectations, but infrastructure and supply constraints continue to restrict data center buildouts. During the earnings call on 2 September 2026, CEO Hock Tan stated that customer demand could support significantly higher shipments, though the company maintains a conservative outlook.

The company projects its artificial intelligence revenue will double to $115 billion in fiscal 2027 and reach $230 billion in fiscal 2028. Tan highlighted multidimensional challenges slowing data center deployments, specifically pointing to land, power, and shell limitations, alongside market shortages of High-Bandwidth Memory chips secured by customers.

For the fiscal third quarter, Broadcom posted revenue of $29.59 billion, topping estimates of $29.36 billion, with AI revenue contributing $16.7 billion against expectations of $15.9 billion. Adjusted earnings reached $3.32 per share, surpassing the projected $3.24 per share.

Despite the beat, shares fell 7% in after-hours trading and nearly 4% in premarket trading on 3 September 2026 after fourth-quarter revenue guidance of $34.8 billion trailed analyst projections of $35.0 billion, according to Gary Black, Managing Partner at The Future Fund LLC.