Broadcom (AVGO -0.32%) has a major event coming up on Sept. 2 that could change the trajectory of its stock in 2026: its fiscal 2026 third-quarter earnings report. Broadcom's stock has done some interesting things following earnings reports, and looking at history can provide investors with valuable insights into where the stock is heading.
I think Broadcom's next report could kick-start a rally, especially after what happened following its last quarterly readout.
Image source: The Motley Fool.
The market did not receive fiscal Q2's results well
The last time investors heard from Broadcom was on June 3, when it reported results for the fiscal quarter that ended May 3. The stock sank by more than 12% the day after that report was released. The market's poor reaction stemmed from inflated expectations: Broadcom management reiterated its prior guidance that it expects to deliver $100 billion in AI semiconductor revenue in fiscal 2027. The market had been expecting the company to raise that forecast, and so it sold off the stock.
Broadcom is still reeling from the sell-off that began with its fiscal Q2 earnings, and the stock is now down by more than 25% from its all-time high.
NASDAQ: AVGO
Key Data Points
Over the past three years, Broadcom has only been down from its all-time high by a greater percentage once: during the tariff-induced sell-off in April 2025. After it reported its fiscal Q2 2025 earnings on June 5, the stock fell 5%, so even when the stock was already beaten down, it still fell following earnings.
That doesn't bode well for Broadcom ahead of this earnings report, as it seems that it's quite common for this stock to decline after reporting results. But this time may be different. At 31 times forward earnings, Broadcom's valuation is near the lower end of the range it has been trading in this year.
AVGO PE Ratio (Forward) data by YCharts.
This is a good setup for a stock that could rise following earnings, but it's also a fair price to pay for the stock as-is. Depending on what Broadcom says during its fiscal Q3 report, I could see the stock moving in either direction.
If management raises its artificial intelligence semiconductor guidance for 2027, don't be surprised to see the stock skyrocket. If its forecast holds steady, the stock could stay flat or decline. Regardless, I'm still bullish on Broadcom's long-term prospects because its custom AI chips are becoming increasingly popular among AI hyperscalers.
2027 could be an incredible year for Broadcom, pushing the stock to new heights. Regardless of what happens with its Q3 report (unless Broadcom drastically cuts its 2027 revenue guidance), I'm still bullish on Broadcom over the next few years, and I believe it will be a top-performing AI stock over that time frame.
