Three Big Catalysts Could Decide Broadcom's Earnings-Day Pop, Analyst Says

Core Viewpoint - Broadcom Inc. is expected to highlight its accelerating artificial intelligence (AI) business in its upcoming results, with a focus on fiscal 2026 revenue guidance and gross margin trends [1][2]. Revenue Guidance - Analyst James Schneider anticipates that Broadcom will raise its fiscal 2026 AI revenue guidance above the previous forecast of 100% year-over-year growth [4]. - Broadcom's fiscal 2026 and fiscal 2027 AI revenue is projected at $45.4 billion and $77.3 billion, indicating annual growth rates of +128% and +70% respectively [6]. Key Contributors - The contributions from Alphabet Inc.'s Google and OpenAI are expected to be significant in fiscal 2026, with investors closely monitoring Google's spending trends and OpenAI's role in the growth outlook [2][7]. - Investor expectations are elevated due to strong performance from peers like Nvidia Corp. and positive demand signals from Google following its Gemini 3 launch [3][5]. Gross Margin Trends - The gross margin progression for fiscal 2026 is a critical factor, with Broadcom's custom XPU business projected to grow over 160% year-over-year, which may lead to near-term margin dilution [8]. Market Reactions - Three main factors are likely to influence Broadcom's stock reaction on earnings day: the potential increase in fiscal 2026 AI revenue guidance, the expected contributions from Google and OpenAI, and the fiscal 2026 gross margin progression [7]. - The market is already anticipating an AI revenue guidance boost, and new data points on customer spending and design wins could impact near-term stock performance [9]. Earnings Estimates - Schneider has raised fiscal 2026 and fiscal 2027 earnings per share (EPS) estimates by approximately 14% and introduced EPS forecasts for fiscal 2028, 2029, and 2030 at $17.35, $20.00, and $22.40 respectively [10].