Broadcom Smashed Earnings — So Why Did Investors Sell the Stock?

Broadcom shares fell after the company issued fourth-quarter guidance that trailed Wall Street’s target. The Broadcom revenue forecast miss overshadowed a blowout third quarter built on soaring AI chip sales. Broadcom told investors to expect roughly $34.8 billion in fiscal fourth-quarter revenue. Analysts polled by LSEG had expected about $35.03 billion, according to Reuters. The gap is small in percentage terms. But it landed on a stock priced for perfection, and traders sold first and asked questions later.

The Broadcom revenue forecast miss, by the numbers

Broadcom’s own numbers tell two different stories. The third quarter, reported on September 2, was excellent. Revenue hit $29.6 billion, up 86% from a year earlier, according to the company’s investor relations release. Non-GAAP operating income reached $20.1 billion, a 92% jump. Free cash flow came in at $13.7 billion, or 46% of revenue.

Broadcom revenue forecast miss: inside a semiconductor fabrication facility

The trouble sits in the outlook. Broadcom guided fourth-quarter revenue to about $34.8 billion. That still marks 93% growth from a year earlier. Yet it fell short of the $35.03 billion consensus tracked by LSEG. Bloomberg’s own survey put the average estimate near $35.1 billion, with some analysts modeling above $36 billion. Broadcom also guided non-GAAP operating margin to about 66% of revenue for the quarter, flat against the year-ago period. Wall Street had penciled in further margin expansion, not a plateau.

What Hock Tan and Amie Thuener Told Investors

Broadcom CEO Hock Tan pointed to a specific growth engine. “Demand for our custom AI accelerators and networking continues to be very strong,” Tan said in the earnings release. He noted that AI semiconductor revenue reached $16.7 billion in the third quarter, up 221% year-over-year and 54% from the prior quarter. Tan told investors that momentum would continue. He guided AI semiconductor revenue to climb to $21.7 billion in the fourth quarter, a 236% annual increase.

CFO Amie Thuener echoed that confidence while acknowledging the flat margin outlook. “We delivered non-GAAP operating income growth of 92% year-over-year, as consolidated revenue grew 86% year-over-year to $29.6 billion,” Thuener said. She added that fourth-quarter revenue growth is forecast at 93% year-over-year, with the non-GAAP operating margin held at 66%, flat from a year ago. Investors read that as a signal. Heavy investment, not weakening demand, is compressing near-term profitability.

AI Chip Demand Is Soaring — So Why the Forecast Gap?

Broadcom’s custom AI chip business, often called XPUs, has become central to its growth story. The company designs application-specific processors for hyperscale customers, including Alphabet’s Google. Google’s tensor processing units, built with Broadcom, sit at the center of that partnership. Broadcom has also helped arrange financing so Anthropic can buy the computing power its custom chips help produce. That build-out sits inside a wider debate over chip export bills touching Anthropic and the industry group ITI. Export strength elsewhere reinforces the point. South Korea’s chip exports hit a record in the same stretch, a sign that global AI infrastructure spending has not slowed.

Competition is the other half of the story. Rival Nvidia delivered a strong forecast of its own the week before Broadcom reported. Bloomberg Intelligence analysts said Nvidia had set a high sales bar for the rest of the sector. Marvell Technology and MediaTek are both racing to win custom chip work, and both count Nvidia as a backer. Marvell announced a deal last month to help build custom semiconductors for Google, a customer Broadcom has long served. That competitive pressure, more than any drop-off in AI demand, appears to explain the cautious guidance.

How Wall Street Reacted to the Forecast Miss

Broadcom shares dropped about 4% in after-hours trading once the numbers landed, according to Bloomberg. The stock had climbed roughly 6% for the year heading into the report, leaving little room for disappointment. Some analysts pushed back on the sell-off. Bernstein’s Stacy Rasgon said the underlying quarter was strong. He called the results very, very good and noted that semiconductor revenue actually landed slightly above expectations. Other analysts framed the move as a reset in expectations after a run of AI-driven gains, rather than a sign of fading demand.

What Comes Next for Broadcom’s AI Chip Business

Broadcom’s own guidance points to continued expansion, not contraction. Management has said it expects AI-related revenue to keep growing sharply into fiscal 2027 and 2028, based on commitments already on the books. Broadcom is not alone in wiring multi-year AI compute commitments into today’s numbers. OpenAI has been in its own funding talks tied to a rising valuation, and its backers are locking in the same kind of long-term computing bets Broadcom is chasing with Anthropic. The financing arrangements with Apollo Global Management and Blackstone still need to close and fund actual chip purchases, a process that will take years to play out. Investors will also watch whether new custom chip customers emerge beyond Google, and whether Broadcom can defend its lead against Marvell and MediaTek. The next real test comes when Broadcom reports fourth-quarter results in December. The market will then see whether $34.8 billion in revenue landed, or beat it.

Frequently Asked Questions

What is the Broadcom revenue forecast miss?

The Broadcom revenue forecast miss refers to the company’s fourth-quarter guidance of about $34.8 billion, below the $35.03 billion analysts expected, according to LSEG data cited by Reuters.

Why did Broadcom stock fall after strong earnings?

Shares fell because the fourth-quarter outlook missed consensus estimates, even though third-quarter revenue grew 86% and beat expectations. Investors focused on the forward guidance rather than the results already reported.

How much did Broadcom’s AI chip revenue grow?

Broadcom’s AI semiconductor revenue reached $16.7 billion in the third quarter, up 221% from a year earlier. The company guided AI semiconductor revenue to $21.7 billion for the fourth quarter.

What operating margin did Broadcom guide for the fourth quarter?

Broadcom guided non-GAAP operating margin to approximately 66% of revenue for the fourth quarter, flat compared with the year-ago period.

Is competition affecting Broadcom’s custom chip business?

Yes. Marvell Technology and MediaTek are both pursuing custom AI chip deals, and Nvidia’s own strong forecast the week before Broadcom’s report raised expectations across the sector.

Does the forecast miss mean AI chip demand is slowing?

Not according to Broadcom’s own numbers. Guidance still calls for 93% year-over-year revenue growth in the fourth quarter. Analysts including Bernstein’s Stacy Rasgon described the underlying business as strong.

Sources

Japan’s Rates Just Hit a 31-Year High — But the Yen Fell Anyway

The Bank of Japan rate hike landed on Friday, September 18, 2026, lifting the country’s benchmark borrowing cost to 1.25%. That is the highest level since 1995, a full 31-year high. The board voted 7-2 for the increase, and two members pushed to hold steady instead. Governor Kazuo Ueda said the bank will not commit to a fixed pace for future moves. He signaled further hikes could follow if inflation risks keep building. The decision lands as central banks worldwide tighten policy together, from Washington to Frankfurt.

The Bank of Japan Rate Hike Pushes Borrowing Costs to a 31-Year High

The BOJ raised its key overnight rate by 25 basis points, from 1.00% to 1.25%. The increase came three months after the bank’s last hike in June. That gap is shorter than the six-month intervals the BOJ used earlier in its tightening cycle, according to UPI. The bank has been raising rates since it ended negative interest rates and large-scale easing in March 2024. Japan’s core consumer price index, which excludes fresh food, rose 1.7% in August from a year earlier. That sits just under the BOJ’s 2% target, but policymakers worry it could overshoot.

Bank of Japan rate hike: Tokyo financial district skyline at dusk

A Divided Board: Why Two Policymakers Opposed the Rate Hike

Board members Toichiro Asada and Ayano Sato dissented from the hike. Both argued the bank should wait. Asada has said core inflation still sits below 2%, so a further tightening move looked premature to him. Prime Minister Sanae Takaichi appointed both dissenters to the board. Her government favors expansive fiscal policy, including a cut to the consumption tax on food, which sits in tension with the BOJ’s tightening path. That split vote mattered to markets. It signaled the board is not unified behind a fast tightening pace, even as Governor Ueda kept the door open to more increases.

Market Reaction to the Rate Hike: Yen, Nikkei, and Bond Yields

Higher rates usually lift a currency by drawing in yield-seeking money. This time, the yen fell instead. USD/JPY pushed back above 157 after the announcement. Traders had wanted a clearer signal on future hikes and did not get one from the 7-2 split or from Ueda’s cautious tone. The Nikkei 225 rose about 1.5% on the day, while the 10-year Japanese government bond yield eased back after climbing toward three-decade highs in recent weeks. The yen’s weakness is not new this year. It slid to nearly 164 per dollar in July, close to a 40-year low, prompting Japan to spend a record 15.4 trillion yen buying its own currency between July 30 and August 26. The United States and South Korea joined that intervention effort, a rare instance of coordinated currency support among the three economies.

A Global Rate-Hike Wave: the Fed and ECB Also Tightened

The Bank of Japan rate hike did not happen in isolation. The U.S. Federal Reserve raised its own benchmark rate by 25 basis points on September 16, its first increase since 2023. The European Central Bank moved even earlier, lifting its deposit rate by 25 basis points on September 10 to 2.50%. All three institutions point to the same pressure: oil prices climbing on the back of the conflict in the Middle East, which has pushed inflation above target across major economies. Resource-poor Japan imports nearly all its energy, so it feels that shock directly. The synchronized tightening has also kept government borrowing costs elevated worldwide, a trend visible in the recent climb in U.S. Treasury yields and in Japan’s own 10-year bond. The ECB’s September increase marked its second hike since the war began and, according to a Reuters poll, likely its last for now.

Where Japan’s Interest Rates Go From Here

Ueda gave few hints about the exact timing of the next move. “We don’t have any pre-set idea in mind such as once every three months,” he told reporters after the meeting, according to Reuters. He added that the bank would decide meeting by meeting whether underlying inflation was stabilizing near 2%. Asked whether the BOJ might deliver a bigger or back-to-back increase, he said, “There could be various possibilities. We shouldn’t rule anything out.” U.S. Treasury Secretary Scott Bessent has also pressed Tokyo to normalize policy faster and support the yen, adding external pressure to the BOJ’s own inflation math. The bank’s next policy meeting runs October 29-30, when it will publish a fresh quarterly Outlook Report with updated growth and inflation forecasts. Analysts will watch wage negotiations and oil prices closely between now and then, since both feed directly into the BOJ’s inflation outlook. Some traders also flagged that a slide toward 160 yen per dollar could invite fresh government intervention to defend the currency.

Frequently Asked Questions About the Bank of Japan Rate Hike

What did the Bank of Japan decide on September 18, 2026?
The BOJ raised its policy rate by 25 basis points to 1.25%, the highest level since 1995. The board voted 7-2 in favor of the increase.

How big was the Bank of Japan rate hike?
The hike moved the benchmark rate from 1.00% to 1.25%, a quarter-point increase. It was the BOJ’s first hike since June 2026.

Why did the yen fall after the Bank of Japan raised rates?
The yen weakened because the board’s split vote and Governor Ueda’s cautious comments suggested the BOJ is in no rush to hike again soon. A wide interest-rate gap with the United States also keeps pressure on the currency.

How does the Bank of Japan rate hike compare with the Fed and ECB?
All three central banks raised rates within days of each other in September 2026, citing inflation pressure tied to rising oil prices from the Middle East conflict. The Fed hiked on September 16 and the ECB on September 10.

Will the Bank of Japan raise rates again?
Governor Ueda has not ruled out further increases but declined to commit to a fixed schedule. The bank’s next meeting, on October 29-30, will include updated inflation forecasts.

What is Japan’s core inflation rate now?
Core consumer prices, excluding fresh food, rose 1.7% year-on-year in August 2026, just under the BOJ’s 2% target.

Sources

Starbucks Is Ready to Sell the Coffee Empire It Fought to Own Outright

A Starbucks Japan stake sale is now under formal consideration. Reuters reported the news, and multiple outlets confirmed it on 16 September 2026. Starbucks is exploring a sale of a majority stake in its Japanese operations. The deal could value the business at roughly $3 billion. A formal sale process could begin as soon as the fourth quarter of 2026.

The move would reverse a decision Starbucks made just over a decade ago. In 2014, the company paid about $914 million to buy out its longstanding local partner, Sazaby League. That deal gave Starbucks full ownership of the Japan business for the first time.

Why a Starbucks Japan stake sale is on the table now

Starbucks Japan has grown steadily since that 2014 buyout. The chain has expanded from roughly 1,050 stores to 1,883 stores as of September 2025. That makes it Starbucks’s largest company-operated market outside the United States. It also represents close to 9% of Starbucks’s entire global store network on its own.

Starbucks Japan stake sale — illustrative image

The exploration comes as CEO Brian Niccol reviews Starbucks’s international footprint more broadly. In North America, the company has already closed stores and cut corporate staffing. Those moves are part of a wider push to improve profitability. A Japan stake sale would fit the same pattern. It raises cash and reduces direct operational exposure. A local partner might simply run stores more efficiently than a distant head office can.

Who might buy in

A deal of this size is expected to draw serious interest. Both international and Japanese private equity firms are seen as likely bidders. Starbucks retaining a minority stake, rather than exiting Japan entirely, would let the company keep two things. It keeps brand control and licensing revenue, while offloading the capital and staffing costs of running nearly 1,900 stores directly.

What a sale would signal about Starbucks’s strategy

Selling down a market Starbucks fought to fully own less than 12 years ago sends a clear signal. It suggests the company now values cash and operational flexibility over direct ownership. It also puts Japan in the same conversation as Starbucks’s cost-cutting push in North America. That link shows the strategic review is genuinely global. It is not limited only to underperforming markets back home.

What a stake sale would mean for customers

A change in ownership structure rarely changes the menu overnight. Starbucks stores in Tokyo, Osaka and other Japanese cities would likely keep operating under the same brand and the same drink lineup. Licensing deals like this usually leave day-to-day store operations to the new majority owner, while Starbucks keeps approval rights over branding and product standards. Customers are more likely to notice slower store openings, or a shift in which neighborhoods get new locations, than any visible change at the counter itself.

Employees are a bigger open question. Past Starbucks ownership changes in other markets have generally preserved existing staff, but a new majority owner sometimes brings its own management team in at the corporate level, even when frontline jobs stay untouched.

What the timeline looks like from here

No formal process has launched yet. A sale could begin as early as the fourth quarter of 2026, if Starbucks decides to proceed. A deal of this size would likely take months to finalize once bidders are identified. A completed sale is therefore unlikely before well into 2027. Store operations and the day-to-day Starbucks Japan customer experience are not expected to change during the review period itself.

The potential sale comes during a week of notable earnings and forecast news. That includes Dave & Buster’s earnings miss and a fresh Bank of America economic forecast. Consumer-facing companies across the board are reassessing strategy heading into next year.

Frequently asked questions

How much could the Starbucks Japan stake sale be worth?

Reports value the potential deal at roughly $3 billion for a majority stake in Starbucks’s Japan business.

How many Starbucks stores are in Japan?

Starbucks Japan operated 1,883 stores as of September 2025, close to 9% of the company’s global store count.

Did Starbucks always own its Japan business outright?

No. Starbucks took full ownership of Japan in 2014 after buying out its longtime local partner, Sazaby League, for about $914 million.

When could a formal sale process begin?

Reports indicate a formal process could launch as early as the fourth quarter of 2026.

Who might buy a stake in Starbucks Japan?

The deal is expected to draw interest from both international and Japanese private equity firms.

Sources

  • CNBC — Starbucks considers selling majority stake in its Japan business: Reuters. cnbc.com
  • Yahoo Finance — Starbucks explores majority stake sale in Japan business at potential $3 billion valuation. finance.yahoo.com

DoorDash Just Bought Its Way Onto Your College Campus for $300 Million

The DoorDash Grubhub Campus Dining deal was announced on 15 September 2026. DoorDash will acquire the campus-dining unit of Wonder Group’s Grubhub business. The price tag is $300 million. DoorDash is also investing an additional $125 million directly in Wonder itself. That brings the total value of the combined transaction to $425 million.

Grubhub Campus Dining runs on technology originally built by a company called Tapingo. It lets students at more than 450 colleges and universities order meals from campus dining halls and on-campus restaurants. They can order through a mobile app or a kiosk. Students then pay with campus dining dollars and schedule a pickup time.

What the DoorDash Grubhub Campus Dining deal actually covers

The acquisition is narrower than a full Grubhub buyout. DoorDash is taking only the campus-dining division. It is not acquiring Wonder’s broader Grubhub delivery marketplace. Wonder built its business around ghost kitchens and food-hall concepts before it acquired Grubhub. The company keeps the rest of the Grubhub operation. In return, it gains DoorDash as an investor and strategic partner. Regulatory approval is still pending. The companies expect the transaction to close in early 2027.

DoorDash Grubhub Campus Dining — illustrative image

Why campus dining is worth $300 million to DoorDash

College students are a demographic DoorDash has chased for years. The theory is simple: ordering habits formed at 19 tend to stick for life. Owning the payment and ordering rail inside dining halls goes further than just delivering food to a dorm room. It gives DoorDash a foothold that’s harder for Uber Eats, or a campus’s own dining vendor, to dislodge later on.

DoorDash has said it plans to expand Grubhub Campus Dining to more U.S. schools once the deal closes. It also wants to extend the underlying technology beyond campuses entirely. Stadiums and hotels share a similar logistics problem: pay with a closed-loop balance, then pick up on a schedule.

What it means for Wonder

For Wonder, the deal converts a division it wasn’t built to run into cash. It also creates a strategic tie-up with one of the two dominant U.S. delivery platforms. The move signals something about Wonder’s broader strategy too. The company has tried stitching together ghost kitchens, food halls and a delivery marketplace under one roof. That strategy now looks like it’s being trimmed down, so Wonder can focus on the pieces it can scale by itself.

How this fits DoorDash’s bigger strategy

DoorDash has spent the past few years pushing beyond restaurant delivery into grocery, retail and now closed-loop campus payments. Each move follows a similar logic: find a market where a captive audience already has a habit, then own the technology layer underneath it. Campus dining dollars work a lot like a prepaid card system, which gives DoorDash payments experience it can reuse in stadiums, hotels and other venues that run on similar closed-loop balances.

The acquisition also puts DoorDash closer to competitor Uber, which has made its own moves into adjacent delivery and logistics categories over the past two years. Neither company has fully cracked the campus market before now, which is part of why the $300 million price tag drew attention from analysts covering the sector.

What’s left before this closes

Both companies need regulatory sign-off before the deal can close in early 2027. A unit acquisition like this typically draws less scrutiny than a full-company merger would. Students at the 450-plus participating schools are unlikely to notice immediate changes in the app they already use. The bigger shifts, like new campuses or a stadium and hotel rollout, would only come after the deal formally closes.

The deal adds to a busy stretch of big tech earnings and dealmaking this month. It follows other consumer-facing restructuring moves too, including Dave & Buster’s earnings miss. Consumer and food-service companies are recalibrating strategy across the board as they head into 2027.

Frequently asked questions

How much is DoorDash paying for Grubhub Campus Dining?

DoorDash is paying $300 million for the campus-dining unit and investing an additional $125 million in Wonder, for a combined deal value of $425 million.

Is DoorDash buying all of Grubhub?

No. DoorDash is acquiring only the Grubhub Campus Dining division. Wonder retains the rest of its Grubhub operations.

How many colleges use Grubhub Campus Dining?

More than 450 colleges and universities currently use the platform for on-campus food ordering and payment.

When will the deal close?

The companies expect the transaction to close in early 2027, pending regulatory approval.

Will DoorDash expand the service beyond college campuses?

DoorDash has said it plans to bring the underlying technology to venues such as stadiums and hotels after the deal closes.

Sources

  • TechCrunch — Wonder scores a $425 million partnership with DoorDash as it builds its food empire. techcrunch.com
  • Restaurant Dive — DoorDash buys Grubhub campus unit for $300M. restaurantdive.com

Sony and Warner Say Anthropic Pirated Their Songs to Train Claude — Now It’s a $3 Billion Fight

The Anthropic music publishers lawsuit escalated this month. The AI company and its CEO, Dario Amodei, asked a California federal court to narrow the case. Sony Music Publishing and Warner Chappell Music filed the original suit. It now seeks more than $3 billion in damages. The publishers accuse Anthropic of illegally downloading, scraping and torrenting thousands of copyrighted songs. They say the company used that material to train its Claude AI models.

The dispute centers on more than 20,000 musical works, according to the publishers’ filing. Sony and Warner Chappell allege Anthropic obtained lyrics and sheet music through pirate sources. Those sources include Library Genesis and the Pirate Library Mirror. Neither is a licensed channel for copyrighted material.

What the Anthropic music publishers lawsuit actually alleges

The publishers describe the alleged conduct in blunt terms. They call it one of the largest and most blatant ongoing thefts of intellectual property they have seen. They say Anthropic scraped and torrented songs at scale. The company then used that material to train models. Those models, the suit claims, can reproduce song lyrics on request. The suit names both Anthropic as a company and Dario Amodei personally. Cofounder Benjamin Mann is also named as an individual defendant.

Anthropic music publishers lawsuit — illustrative image

Anthropic disputes the claims. The company said in a statement that it disagrees with the publishers’ position. It intends to defend itself robustly in court. Its recent motion asks the judge to separate out two specific pieces. The first is the claims against Amodei individually. The second involves arguments tied to what Claude’s chatbot actually outputs to users. Anthropic wants both separated from the broader case against the company itself.

Why the individual claims against Amodei matter

Naming a CEO personally in a copyright suit is not routine. It raises the legal stakes beyond corporate liability. It reaches into personal exposure for Anthropic’s leadership too. Anthropic’s motion to narrow the case specifically targets this piece. The company argues the claims against Amodei as an individual do not hold up. It says the publishers have framed those claims incorrectly. How the court rules on that motion matters a great deal. It will shape how much of the case moves toward trial. It will also determine how much gets dismissed early instead.

How this fits the wider AI copyright fight

Music publishers are not alone in taking AI companies to court. Authors, news organizations and visual artists have filed similar suits. Their targets include several AI developers over the past two years. Each argues that scraping copyrighted material without a license violates their rights. Anthropic has faced parallel scrutiny before this suit. The case was filed in January 2026 and has expanded since then. It adds music rights specifically to a growing list of disputes across the industry.

A ruling favorable to the publishers could set a costly precedent. AI companies might need to rethink how they source training data going forward. That concern applies especially to lyrics and other tightly licensed creative content.

What the case means for AI training data broadly

The outcome could influence licensing negotiations well beyond Anthropic itself. Courts might treat scraping pirated sources as a straightforward violation. If so, AI companies could face real pressure to change course. They may need to strike licensing deals with publishers before training future models. That approach beats litigating after the fact, from a cost perspective. Some AI firms have already begun signing content-licensing agreements with publishers and media companies. This case could accelerate that trend regardless of how it ends.

Where the case goes from here

The California federal court will first rule on Anthropic’s motion to narrow the suit. That ruling determines how much of the case proceeds, and against whom specifically. A full trial would likely take months or years to reach. That’s true if the case isn’t settled first, given the scale of evidence involved. The suit covers more than 20,000 works, after all. Anthropic’s public statement suggests one thing clearly. The company plans to fight the claims rather than negotiate an early settlement. That posture could still shift, though, depending on the court’s initial rulings.

The suit adds to a busy year for Anthropic on the business side. That includes its own involvement in chip export legislation alongside industry groups. It also arrives as competitor OpenAI faces its own scrutiny. Funding talks tied to OpenAI’s valuation are one example. Legal and financial pressure is mounting across the AI sector at the same time, on multiple fronts.

Frequently asked questions

How much money are the music publishers seeking?

Sony Music Publishing and Warner Chappell are seeking more than $3 billion in damages from Anthropic.

What does the lawsuit accuse Anthropic of doing?

The publishers accuse Anthropic of illegally downloading, scraping and torrenting thousands of copyrighted songs, including lyrics and sheet music, to train its Claude AI models.

Is Dario Amodei personally named in the lawsuit?

Yes. The suit names Amodei individually, along with Anthropic cofounder Benjamin Mann, in addition to the company itself.

What is Anthropic asking the court to do?

Anthropic has asked the court to narrow the case, specifically challenging the claims against Amodei personally and arguments about chatbot output.

How many songs does the lawsuit cover?

The publishers’ filing covers more than 20,000 musical works.

Sources

  • TechCrunch — Sony Music, Warner sue Anthropic, alleging a “brazen campaign” of intellectual property theft. techcrunch.com
  • Axios — Music publishers sue Anthropic, allege “blatant theft” of copyrighted music. axios.com
  • Law360 — Anthropic, CEO ask judge to narrow music publisher IP suit. law360.com