Broadcom’s $3 Billion Debt Move and Google Exposure Put September Earnings in the Spotlight

Broadcom reports fiscal Q3 on Sept 3; AI revenue trajectory and Google custom-chip relationship are key. The company executed a $2.9B bond buyback, signaling financial discipline amid surging AI capex.

For Broadcom, the next big inflection point arrives on September 3, when the chipmaker reports fiscal third-quarter results after the closing bell. What Hock Tan says about two things will determine whether the stock can recapture its all-time high: the trajectory of AI semiconductor revenue and the evolving relationship with its largest custom-chip customer, Google. But the company has already laid down a marker of financial discipline in the meantime.

Broadcom completed a bond buyback program on June 23, originally capped at $2.5 billion but raised to $3.0 billion as the tender drew heavy interest. Investors submitted roughly $5.5 billion in notes; the company accepted $2.9 billion, concentrating on the two longest-dated series: $1.84 billion of 4.926% notes due 2037 and $1.05 billion of 4.900% notes due 2038. Shorter maturities were left untouched. The move signals management’s willingness to actively manage the balance sheet even as capital expenditure needs mount for its AI infrastructure push.

The repurchase is easily funded from Broadcom’s cash machine. In the fiscal second quarter, free cash flow hit $10.3 billion, pushing cash balances to nearly $19.6 billion from $14.2 billion in the prior quarter. Revenue surged 48% year over year to $22.2 billion, and adjusted EBITDA landed at $15.2 billion — a 69% margin. For the current quarter, the company expects revenue of approximately $29.4 billion, with AI semiconductor growth of more than 200% year over year, a sharp acceleration from the 143% posted in Q2.

Not everyone is convinced the stock deserves its two-trillion-dollar valuation. A Seeking Alpha analyst downgraded Broadcom to Hold/Avoid on June 23, arguing that a forward P/E of 35.4 already prices in aggressive AI revenue targets. The analyst acknowledged the viability of Broadcom’s dual strategy — custom AI chips and high-margin VMware software — but flagged a new risk profile tied to the $35 billion infrastructure platform deal with Apollo and Blackstone. That structure, the analyst wrote, turns Broadcom into a credit vehicle exposed to customer solvency, grid capacity constraints, and management complexity. Macquarie also cut its rating to Neutral after Q2 results, citing Google’s decision to bring MediaTek on as a second chip supplier. The bank estimates Broadcom’s share of Google TPU revenue could slip from around 95% in 2026 to 65% by 2028. CEO Hock Tan didn’t dispute the diversification, noting it’s a natural consequence of Google’s growing demand, and pointed to multi-gigawatt commitments from six core customers through 2028, plus an Alphabet contract for TPU development that runs until 2031. The wider Wall Street crowd remains bullish: 24 of 27 analysts rate the stock Strong Buy, none say Sell.

The XPV platform sits at the center of the bull case. Apollo and Blackstone are anchor investors in a plan to deliver more than 20 gigawatts of compute capacity using Broadcom’s XPUs and networking gear, targeting customers such as Anthropic and OpenAI by 2028. The initial tranche is a $35 billion deal to fund over a gigawatt of infrastructure for Anthropic on Fluidstack sites, with construction starting in mid-2026. Broadcom supplies the hardware, while the private-equity partners provide the capital — aiming to lower the cost per token for training and inference.

The stock recently changed hands at around €334–€337, roughly 21–22% below its all-time high of €429.60 set on June 3. Year to date, the shares are still up about 47%. The September 3 report will test both sides of the argument: a $16 billion AI revenue line that needs to show continued acceleration, and Hock Tan’s candid assessment of the Google supply picture. If the numbers and commentary align, the stock could take a run at that June high. If not, the bears will have fresh ammunition.