Broadcom AI revenue surges 74% but stock tumbles on profitability concerns despite record earnings

Broadcom reports fourth quarter earnings after the bell

A Broadcom sign is pictured as the company prepares to launch new optical chip tech to fend off Nvidia in San Jose, California, U.S., September 5, 2025. Broadcom is scheduled to report its fourth-quarter earnings after market close on Thursday. Here's what analysts are expecting, according to LSEG: Wall Street is expecting Broadcom's overall revenue to increase 25% in the quarter ended in October, from $14.05 billion a year earlier. Analysts are expecting the chipmaker to guide for $1.95 in adjusted earnings per share on $18.27 billion in sales in the current quarter. The report comes as investors increasingly see Broadcom as well-placed to capitalize on the AI infrastructure boom both with its custom chips, which it calls XPUs, and the networking technology needed to build massive data centers where thousands of AI chips work as one. Broadcom stock is at all-time highs and has climbed 75% so far in 2025 as its custom chips, such as Google's tensor processing units, are increasingly seen as a rival to Nvidia's AI chips. The company has a market cap of $1.91 trillion. Google released its latest AI model, Gemini 3, during the quarter, which it said was trained entirely on its TPU chips. Another Broadcom AI customer is OpenAI. The AI startup said in October that it will start deploying custom chips for AI developed with Broadcom starting next year. Broadcom CEO Hock Tan is expected to discuss the company's pipeline of AI chips and partners with investors on Thursday. "We expect investors to focus on FY26 AI revenue guidance, Google and OpenAI revenue contributions, and gross margin trajectory given the steep ramp of custom XPUs," Goldman Sachs analyst James Schneider wrote in a note last month. He has the equivalent of a buy rating on the stock.

Broadcom's stock falls despite another crushing earnings and revenue beat - SiliconANGLE

Broadcom's stock falls despite another crushing earnings and revenue beat Chipmaking giant Broadcom Inc. posted another stellar earnings and revenue beat as it delivered its fourth-quarter financial results, before following up with strong guidance driven by the market's insatiable demand for artificial intelligence processors. The company reported earnings before certain costs such as stock compensation of $1.95 per share, easily beating the analyst consensus estimate of $1.86. Revenue for the period jumped by an impressive 28% to $18.02 billion, well ahead of the $17.49 billion forecast. On a conference call, Broadcom Chief Executive Hock Tan (pictured) said the company's growth was driven by a 74% increase in sales of AI chips, which added around $8.2 billion in additional sales. That increase provided a considerable boost to the company's profitability, too, with net income rising 97% to $8.51 billion in the quarter, up from $4.32 billion one year ago. For the current quarter, Broadcom anticipates revenue of around $19.1 billion at the midpoint of its guidance range, higher than the $18.3 billion forecast by Wall Street analysts. Tan said the company expects AI chip sales to reach $8.2 billion during the quarter, more or less double the total from the same period last year. After Nvidia Corp., Broadcom is probably the biggest beneficiary of the AI industry boom. Its stock has gained more than 75% in the year to date, though strangely, it declined more than 6% in the wake of today's results. The chipmaker doesn't compete directly with Nvidia, which is known for its graphics processing units. Instead, it helps companies to develop and design so-called "custom AI chips", such as Google LLC's tensor processing units. Custom chips are increasingly getting traction in the AI market as an alternative to Nvidia's GPUs, which have been in short supply for some time already. Their popularity stems from their architecture, which differs from GPUs. Whereas GPUs are widely seen as general purpose chips, Google's TPUs and other custom silicon are "application-specific integrated circuits" or ASICs, which can be customized for very specific workloads, enabling companies to squeeze higher performance out of them in some use cases. On a conference call with analysts, Tan said the company has now acquired a fifth customer for its custom chips. He didn't name that latest customer, but said it has placed a $1 billion order that's expected to be delivered towards the end of calendar 2026. On the other hand, Tan did reveal that the AI startup Anthropic PBC is the previously unnamed client that ordered $10 billion worth of Google's TPUs during the prior quarter. He also revealed that Anthropic is one of the first companies to start using Google's latest Ironwood TPU. That suggests encouraging progress for Broadcom. In its last earnings report three months ago, the company said it had just three customers it was working with to develop and produce custom AI chips, in addition to four "prospects", so two of them have now been made official. One of those prospects is OpenAI Group PBC. In October, the company confirmed it's working with the ChatGPT developer to design custom chips that will run its GPT family of large language models. Discussing the appeal of custom AI chips, Tan explained that many AI companies would "prefer to control their own destiny by continuing to drive their multiyear journey to create their own custom AI accelerators, or XPUs as well call them." All told, Broadcom now has a backlog of orders for custom AI chips and other data center components, such as networking chips, that totals a staggering $73 billion, Tan said. He added that the company hopes to turn this into revenue within 18 months. Futurum analyst Daniel Newman told the Wall Street Journal he's expecting the entire AI chips market, including custom accelerators and Nvidia's GPUs, to grow by around $1 trillion a year in the next few years. Custom chips should account for between 25% and 30% of the market, he added. Broadcom is likely to sell around 70% to 80% of all custom chips because very few rivals can compete with it in designing custom silicon. Its biggest competitor is Marvell Technology Inc., which notably helps AWS develop its Trainium AI accelerators, but it has been unable to match Broadcom's traction. "People used to talk about how software was going to eat the world, but now semiconductors are eating the world, and Broadcom has really just mastered the class of custom silicon for AI," Newman said. "This market is only going to get bigger, and all these AI companies are only going to need more chips." Broadcom reports AI chip sales within its semiconductor solutions business unit, which generated $11.07 billion in revenue during the quarter, up 22% from a year earlier. The segment also includes traditional chips used in cars and other gadgets. The company's other major business unit, infrastructure software, delivered $6.94 billion in sales during the quarter, up 26% from a year earlier.

Broadcom's AI Business Is Growing Fast. Here's Why the Stock Is Tanking Anyway.

Investors have scrutinized tech earnings more intensively in recent months amid concerns Silicon Valley is overspending on AI. Broadcom's custom AI chip business is growing rapidly. Wall Street, however, is wary about how much upside that growth suggests. Broadcom (AVGO) on Thursday predicted its AI-related revenue will double year-over-year to $8.2 billion in the current quarter. That would be an acceleration from the most recent quarter, when it grew 74% to $6.5 billion. But the forecast came with a caveat -- and that weighed on the shares today. The stock was recently down about 10% in intraday trading. Broadcom expects its gross margin to contract 100 basis points, or 1 percentage point, quarter-over-quarter, "primarily reflecting a higher mix of AI revenue," said chief financial officer Kirsten Spears on a call with analysts Thursday night. The notion that higher AI sales might be a drag on profitability wasn't what investors wanted to hear. But investors have lately upped their scrutiny of tech earnings due to concerns about stretched stock valuations and unsustainable infrastructure spending, meaning that even good news is getting put under a microscope. That's led to less-than-rollicking market responses to corporate results. Nvidia (NVDA), the leading supplier of AI chips and Broadcom's largest competitor, blew past estimates with its numbers last month, but its stock slumped under the weight of AI bubble concerns. Software giant Oracle (ORCL) on Wednesday said its backlog now exceeds $500 billion, but it failed to convince investors that its huge AI investments will pay off soon. Its stock slumped yesterday to lead an AI sell-off. Broadcom, meanwhile, isn't the only tech company whose profitability is being pressured by AI. In October, Oracle forecast its AI cloud infrastructure business would achieve gross margins between 30% and 40%, roughly half that of its legacy software business. This year's AI-driven rally has also set a high bar for tech earnings. Heading into Thursday's results, Broadcom shares were up 75% since the start of the year. The stock rose about 20% in the past month alone thanks to Google's newest AI model, which was trained on Broadcom-designed chips and lauded as a serious challenger to OpenAI's ChatGPT. Bank of America analysts in a note Friday called Wall Street's worries about profitability a "fair concern." They lowered their 2026 and 2027 margin estimates by a couple percentage points. Nevertheless, they raised their earnings estimates for those same years, reflecting their belief that faster revenue growth will more than offset narrowing margins. Deutsche Bank analysts made the same adjustments, and raised their share price target.

AI giant Broadcom stock falls 5% -- Why are Broadcom shares dropping; is Oracle to blame?

Broadcom stock falls 5%: Broadcom stock fell nearly 5% in pre-market trading on Friday. The company warned that its margins will decline due to a rising share of AI-related revenue. The update added fresh pressure to a tech market already shaken by cooling investor enthusiasm for artificial intelligence. Broadcom Inc. (AVGO) reported another record-breaking year, with consolidated revenue reaching $64 billion in fiscal 2025, a strong 24% year-over-year increase. The company's explosive momentum was powered largely by its AI business, where revenue surged 65% to $20 billion, solidifying Broadcom's position as one of the biggest beneficiaries of global AI infrastructure spending. Semiconductor revenue for the year rose to $37 billion, with Q4 alone delivering $11.1 billion, up 35% from last year. Infrastructure software also remained a reliable growth engine, contributing $27 billion for the year and $6.9 billion in Q4, boosted by wide adoption of VMware Cloud Foundation. Broadcom closed the fourth quarter with $18 billion in total revenue, up 28% year over year, along with adjusted EBITDA of $12.2 billion, reflecting 34% growth. The company reported a healthy 77.9% gross margin, $11.9 billion in operating income, and $7.5 billion in free cash flow, representing 41% of quarterly revenue. Cash and equivalents stood at $16.2 billion entering fiscal 2026.Looking ahead, Broadcom issued strong guidance. The company expects $19.1 billion in Q1 fiscal 2026 revenue, a 28% year-over-year rise. AI semiconductor revenue is projected to hit $8.2 billion, roughly doubling from last year as demand for custom accelerators and networking solutions accelerates across hyperscalers. Broadcom also raised its annual dividend by 10% to $2.60 per share, citing its robust cash-generation profile. The drop comes as several trillion dollars in tech valuations have weakened since late October. Many investors are now questioning how quickly major AI investments will translate into profits. The broader sentiment weakened further after Oracle reported heavy AI spending and softer forecasts. That forced another selloff across big tech on Thursday. Yet some analysts say the fear is overdone. "Spending intentions remain huge. Hitting the panic button is premature," said Ben Reitzes of Melius Research. Broadcom's stock fell about 5% even after the chipmaker posted strong fiscal Q4 results and upbeat AI guidance. The reaction was driven less by demand concerns and more by expectations, margins, and a market priced for perfection. The company beat revenue and EPS estimates and reported sharp year-over-year growth in AI semiconductor sales. Broadcom also guided above consensus for Q1, projecting about $19.1 billion in revenue and adjusted EBITDA at 67% of revenue. AI chip revenue is expected to double YoY to $8.2 billion in the upcoming quarter. Yet the stock reversed from an early after-hours jump to a steep decline as investors heard more detail on profitability. The message that AI systems and racks -- now a larger share of Broadcom's mix -- carry lower gross margins than custom chips became a key reason for the sell-off. With the stock sitting near all-time highs and priced at a demanding multiple, anything short of massive upside triggered "sell the news" reactions. Broadcom recently disclosed that its gross margins will experience fluctuations throughout the fiscal year, primarily due to shifting revenue mixes across key segments like infrastructure software, networking solutions, and high-performance semiconductors. Despite this, the company maintains a robust $73 billion order backlog, fully scheduled for delivery over the next 18 months, providing clear visibility into sustained revenue streams. Morningstar analysts downplay the recent stock selloff, attributing it to investor worries over gross margin dilution from ramping up production of next-generation AI chips. They counter that these AI accelerators not only enhance operating margins through premium pricing but also fortify Broadcom's competitive edge, ultimately driving higher overall profitability and positioning the firm as a leader in the exploding AI infrastructure market amid 2025's tech rally. Broadcom is riding high on surging demand for its custom AI processors, carving out a significant and growing presence in the data center arena traditionally ruled by Nvidia's dominance. The company's shares have surged nearly 75% year-to-date, reflecting investor confidence in its pivot toward AI-driven growth amid broader semiconductor volatility. In its latest fourth-quarter earnings, Broadcom surpassed Wall Street's revenue forecasts by a wide margin and guided for first-quarter sales of approximately $19.1 billion -- well ahead of the consensus estimate of $18.27 billion. This outperformance underscores Broadcom's ability to capture market share in custom silicon, with analysts projecting continued double-digit revenue growth fueled by hyperscale contracts and the global AI boom. Broadcom plays a pivotal role in powering the AI revolution by designing and manufacturing cutting-edge custom processors tailored for industry giants like Google Cloud and Meta Platforms. These specialized chips offer a compelling alternative to Nvidia's ubiquitous GPUs, enabling hyperscalers to diversify supply chains, mitigate risks from single-vendor dependency, and optimize costs for massive AI workloads. U.S. cloud providers, including Amazon Web Services, Microsoft Azure, and others, are forecasted to pour over $400 billion into AI infrastructure this year alone, with the bulk earmarked for expansive data center builds. These facilities are engineered to handle the immense computational demands of frontier AI models like OpenAI's ChatGPT, Google's Gemini, and Anthropic's Claude, setting the stage for Broadcom to reap billions in recurring revenue as AI adoption scales across enterprise and consumer applications. Broadcom closed at $406.96 on December 12, 2025, down 1.46%, with earlier intraday declines nearing 5%. The day's trading range spanned $394 to $409, reflecting elevated volatility. Volume surged to 26.6 million shares, well above the 22.9 million average, showing heavy institutional repositioning. Even after the drop, Broadcom holds a $1.91 trillion market cap and trades at a P/E ratio of 104.89, underlining the rich valuation that magnified the market's reaction. The stock remains well above its 52-week low of $138 and only slightly off its high of $414.61. Technical indicators show support around the 50-day moving average at $360, which traders may watch if selling deepens. Analyst sentiment still signals long-term confidence, with most ratings in "Strong Buy" territory. The average price target near $372 -- below the current price -- reflects both the stock's premium valuation and the belief that earnings strength is already well reflected in the share price. Broadcom's next earnings update, expected in mid-to-late March 2026, will likely center on margins, backlog quality, and AI system mix. For now, the post-earnings drop looks more like an expectations reset than a challenge to Broadcom's core AI growth story.

Broadcom Q4 2025 Earnings: 8 Things To Know From AI Strength, VMware Growth To Anthropic Deal Reveal

A focus on the accelerators, networking, and other components needed to build infrastructures, plus the signing of huge deals like the new $11 billion sale to Anthropic on top of a massive and growing backlog spike optimism on the future of Broadcom, President and CEO Hock Tan told analysts after his company's fiscal year 2025 financial report. Broadcom, the Palo Alto, Calif.-based designer and producer of chips and infrastructure software, reported fiscal year 2025 total revenue growth of 24 percent over that of fiscal 2024, led by a huge growth in its AI semiconductor and its VMware businesses. Broadcom President and CEO Hock Tan, in both his prepared remarks for the company's fiscal year 2025 financial report and his responses to financial analysts' questions on Thursday, painted a picture of a company for whom AI shows no limits to growth. Tan said Broadcom's fiscal fourth quarter AI semiconductor business grew 74 percent year-over-year, with custom AI semiconductor sales doubling over last year. [Related: AI Semiconductors, VMware Driving Broadcom To New Heights: CEO Hock Tan] At the same time, strong growth in VMware Cloud Foundation revenue pushed infrastructure software revenue growth of 26 percent, he said. "In summary, 2025 was another strong year for Broadcom, and we see the spending momentum by our customers for AI continuing to accelerate in 2026," he said. Tan also revealed that the mystery customer that Broadcom introduced in September as signing a $10 billion custom chip deal was Anthropic, and said that Anthropic in the fourth fiscal quarter signed another deal worth $11 billion. There's a lot to unpack from Broadcom's fiscal 2025 report. To learn more, read CRN's look at eight of the key results for the year as presented by Tan. 'Another Strong Year' For AI, VMware Broadcom had a blockbuster fiscal fourth quarter 2025 and full year 2025, Tan said. Total fiscal 2025 revenue grew 24 percent year-over-year to a record $64 billion, driven by AI semiconductors and VMware. AI revenue grew 65 percent year-over-year to $20 billion, which drove Broadcom's semiconductor revenue to a record $37 billion for the year. On the infrastructure software side, strong adoption of VMware Cloud Foundation or VCF pushed revenue growth of 26 percent year-over-year to $27 billion, he said. "In summary, 2025 was another strong year for Broadcom, and we see the spending momentum by our customers for AI continuing to accelerate in 2026," he said. AI Semiconductor Business Driving Overall Semiconductor Revenue Broadcom's total fiscal fourth quarter reached a record $18 billion, up 28 percent year-over-year on better-than-expected growth in AI semiconductors and infrastructure software, Tan said. Semiconductor revenue reached $11.1 billion, up 35 percent year-over-year driven by a 74 percent growth in AI semiconductor revenue to $6.5 billion, Tan said. "This represents a growth trajectory exceeding 10 times over the 11 quarters we have reported this line of business," he said. "Our custom accelerator business more than doubled year-over-year as we see our customers increase adoption of XPUs, as we call those custom accelerators, in training their LLMs and monetizing their platforms through inferencing APIs and applications. These XPUs, I may add, [have] not only been used to train and inference internal workloads by our customers. The same experience in some situations has been extended externally to other LLM peers, best exemplified at Google, where the TPUs used in creating Gemini are also being used for AI cloud computing by Apple, Cohere, and SSI (Safe Superintelligence) as a sample." Big Customers For AI The scale Broadcom is seeing is significant, Tan said, as exemplified by a massive order from Anthropic. "As you are aware, last quarter, Q3 '25, we received a $10 billion order to sell the latest TPU Ironwood racks to Anthropic," he said. "And this was our fourth custom that we mentioned [previously]. And in this quarter, Q4, we received an additional $11 billion order from this same customer for delivery in late 2026." In the fourth quarter, Broadcom acquired a fifth XPU customer through a $1 billion order placed for delivery in late 2026, Tan said. When asked by financial analysts if that customer was OpenAI, which in October signed a multi-year partnership for accelerator and networking systems for next-generation AI clusters, Tan declined to answer. AI Networking Booming AI networking demand in the quarter was strong as Broadcom saw customers build out their data center infrastructure ahead of deploying AI accelerators, Tan said. "Our current order backlog for AI switches exceeds $10 billion as our latest 102-terabit-per-second Tomahawk 6 switch, the first and only one of its capability out there, continues to book at record rates. And this is just a subset of what we have. We have also secured record orders on DSPs, optical components like lasers, and PCI Express switches all to be deployed in AI data centers." Massive Revenue Growth Already Booked Broadcom's AI-related orders on hand for its XPU and its networking components are currently in excess of $73 billion today, which is almost half of Broadcom's consolidated backlog of $162 billion, Tan said. "We expect this $73 billion in the AI backlog to be delivered over the next 18 months," he said. "And in Q1 fiscal 26, we expect our AI revenue to double year-over-year to $8.2 billion." Actually, Broadcom expects the backlog to only grow, Tan said. "We fully expect more bookings to come in over that period of time, and so don't take that $73 [billion] as the revenue that we ship over the next 18 months," he said. "I'm just saying we have that now, and in that bookings have been accelerating." Non-AI Semiconductor Business Flat Broadcom's fiscal fourth quarter 2025 non-AI semiconductor revenue reached $4.6 billion, which was up only 2 percent year-over-year, Tan said. Broadband semiconductor revenue showed what Tan called "solid recovery," while wireless was flat and all other end semiconductor revenue fell as enterprise spending continue to show limited signs of recovery, he said. "Accordingly, in Q1 we forecast non-AI semiconductor revenue to be approximately $4.1 billion, flat from a year ago [and] down sequentially due to wireless seasonality," he said. Infrastructure Software Revenue Up On VMware Sales Broadcom reported fourth fiscal quarter 2025 infrastructure software revenue of $6.9 billion, up 19 percent year-over-year and above the company's outlook of $6.7 billion, Tan said. The total contract value of bookings in the fourth quarter exceeded $10.4 billion versus $8.2 billion. Broadcom ended the year with $73 billion of infrastructure software backlog, up from last year's $49 billion. Infrastructure software revenue is slated to grow by a low double-digit percentage, he said. "Here's what we see in 2026," he said. "Directionally, we expect AI revenue to continue to accelerate and drive more software growth and non-AI semiconductor revenue to be stable. Infrastructure software revenue will continue to be driven by VMware growth at low double digits. And for Q1 '26, we expect consolidated revenue of approximately $19.1 billion, up 28 percent year-over-year." Customers Will Not Develop Custom Chips Like Broadcom's XPU When asked by an analyst about industry chatter over the possibility that large customers are looking at custom tooling their own AI accelerators, Tan said he does not believe that will happen to any extent. "Don't follow what you hear out there as gospel," he said. "[Developing AI accelerators] a trajectory. It's a multi-year journey. And not too many players doing LLM want to do their own custom AI accelerator for very good reason." It is possible to use general-purpose GPUs or custom software and kernels to accelerate AI, Tan said. "Now, will that mean that over time, they all want to go do it themselves," he said. "Not necessarily. [The] technology in silicon keeps updating, keeps evolving. And if you are an LLM player, where do you put your resources in order to compete in this space, especially when you have to compete at the end of the day against merchant GPUs, who are not slowing down in their rate of evolution. So I see that this concept of customer tooling is an overblown hypothesis, which, frankly, I don't think will happen."

Broadcom's 50‑Year Playbook Gets A Radical Rewrite -- Thanks To OpenAI, Google, Meta - Broadcom (NASDAQ:AVGO)

Broadcom Inc (NASDAQ:AVGO) just pulled off the most lucrative "quiet pivot" in Silicon Valley -- and the market almost missed it while obsessing over a routine 5% dip. Track AVGO stock here. The company that spent half a century being defined by switches, routers and networking silicon is now being redefined by three clients who don't even bother pretending they're anything short of AI superpowers: OpenAI, Alphabet Inc.'s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google and Meta Platforms Inc (NASDAQ:META). AI Custom Chips Take The Wheel The milestone slipped into the earnings print with zero theatrics: custom AI accelerators officially overtook traditional networking as Broadcom's No. 1 revenue line. That single crossover rewires the company's entire growth story. Broadcom isn't selling commodity infrastructure anymore; it's building bespoke silicon for the three companies racing to dominate AI compute. For a firm long cast as the plumbing of the internet, becoming Big Tech's custom-chip confidant is a narrative upgrade no analyst model was calibrated for. Read Also: Nvidia's Empire Just Took A Hit - Broadcom's $10 Billion Deal Is The Plot Twist The Most Profitable Relationship Status Change In Tech Networking hasn't disappeared -- it's just become the ex who still texts but no longer shapes the future. AI accelerators, with their multi-year contracts and hyperscale capex tailwinds, are now the center of gravity. Broadcom has effectively become the high-margin, low-drama alternative to building your own chip team from scratch. And when your new partners collectively operate the largest AI clusters on Earth, the upside math tilts aggressively in your favor. Wall Street Needs A New Lens The Street's fixation on near-term volatility overlooks the larger structural shift: Broadcom's business model no longer hinges on enterprise spending cycles or telco digestion. Its fortunes are now tethered to the fastest-growing compute buildout in history. Nvidia Corp (NASDAQ:NVDA) may define the AI era, but Broadcom is quietly emerging as the custom silicon tailor, fitting the industry's power players. Broadcom didn't reinvent itself overnight. It simply upgraded its playbook -- and its new collaborators just happen to be the ones writing the future of AI. Read Next: AI Spending Is Shifting -- And Broadcom, Marvell Are Positioned To Win Image created using artificial intelligence via Gemini. AVGOBroadcom Inc$361.87-10.9%OverviewGOOGAlphabet Inc$314.59-1.64%GOOGLAlphabet Inc$307.25-1.66%METAMeta Platforms Inc$643.70-1.38%NVDANVIDIA Corp$177.50-1.90%Market News and Data brought to you by Benzinga APIs

Broadcom CEO Hock Tan Just Delivered Incredible News for Nvidia Stock Investors

The data center and semiconductor specialist just provided the clearest evidence yet that the adoption of artificial intelligence (AI) continues to gain steam. The past few years have been a wild ride for Nvidia (NVDA 1.95%) investors. The company's graphics processing units (GPUs) played a crucial role in recent advances in artificial intelligence (AI) and have become the gold standard for AI training and inference. The resulting unprecedented demand for its chips sparked a surge in the company's sales and profits, sending its stock price to new heights. It currently reigns as the world's most valuable company by market cap, valued at $4.3 trillion (as of this writing), and most experts believe AI adoption will continue to climb over the long term. In recent months, however, the buzz has begun to fade. Shareholders are looking for confirmation that the AI investment cycle will yield tangible returns. Add to that the talk of an AI bubble, and it's easy to see why investors are edgy. Broadcom (AVGO 10.90%) just provided the clearest evidence yet that demand for AI remains robust. Blockbuster results Broadcom announced the results of its 2025 fiscal fourth quarter (ended Nov. 2), and the results exceeded expectations by a wide margin. Record revenue of $18.01 billion climbed 28% year over year, fueling adjusted earnings per share (EPS) of $1.95, which jumped 37%. For context, analysts' consensus estimates called for revenue of $17.46 billion and adjusted EPS of $1.87, so Broadcom easily surpassed expectations. Continuing demand for AI solutions fueled the company's impressive results, as AI-based revenue surged 74% year over year, marking the 11th consecutive quarter of AI-centric growth. Free cash flow was also robust, clocking in at $7.47 billion, or 41% of revenue. Broadcom gave investors other reasons to be of good cheer. CEO Hock Tan revealed that Anthropic was the mystery customer behind the $10 billion backlog increase in Q3. He also noted that the AI start-up had placed an additional $11 billion chip order, which is due to be filled by late next year. Despite filling a barrage of orders to generate its record revenue, Broadcom's backlog still stands at $73 billion. Tan also noted that the company added a fifth customer for its custom AI chips, with a $1 billion order for delivery in late 2026. The chief executive also provided a robust first-quarter outlook, guiding for revenue of $19.1 billion, an increase of 28% compared to the prior-year quarter. For context, analysts' consensus estimates were calling for Q4 revenue of $18.31 billion. However, given the company's tendency to underpromise and overdeliver, these numbers are likely conservative. Tan went on to say that he expects the momentum to continue, driving revenue from AI accelerators and Ethernet switches to double year over year to $8.2 billion. A "Broad"er implications While the results are undoubtedly positive for Broadcom investors, it's worth taking a step back, lest we miss the forest for the trees. While it's worth keeping an eye out for an AI-related slowdown is worth considering, these accelerating results indicate these concerns are unjustified, at least for now. Broadcom's accelerating results also add weight to Nvidia's quarterly report, corroborating CEO Jensen Huang's assertion during the company's earnings call that "AI has reached a tipping point." He also noted that while there's been talk of an AI bubble, "From our vantage point, we see something very different." Huang estimates that AI-fueled data center spending will ramp to between $3 trillion and $4 trillion by the end of the decade. To provide context, for Nvidia's fiscal year, which ends in January, Wall Street is expecting revenue of $213 billion. This helps to illustrate the massive opportunity that remains. Furthermore, Broadcom noted that the majority of its increasing backlog resulted from growing demand from its existing hyperscale customers, as the major cloud infrastructure providers are boosting capital expenditures (capex). To that end, Tan said (emphasis mine), "We see the spending momentum by our customers for AI continuing to accelerate in 2026." That accelerating demand, by extension, bodes well for Nvidia. Its chip still dominate, controlling 92% of the data center GPU market, according to IoT Analytics. Most experts agree that as AI adoption moves downstream, the need for the necessary processors will increase. As the industry standard, Nvidia's GPUs will still be in high demand. Despite recent weakness, Nvidia stock has still soared more than 1,100% since the advent of AI in early 2023 (as of this writing). Furthermore, both Nvidia and Broadcom continue to put up stunning growth numbers, despite the suggestion that AI growth is slowing. For investors looking to start or increase a position, Nvidia stock is currently selling for just 24 times next year's expected earnings, an attractive price to pay for a company on track to increase revenue by 77% this fiscal year and 37% in fiscal 2027. Given Nvidia's significant market share, track record of innovation, and first-mover advantage, I'd argue the company is well-positioned to continue to benefit from the accelerating adoption of AI. Furthermore, given that Broadcom is selling for 29 times next year's earnings, it's on my hot list as well.

Broadcom outlines $19.1B Q1 2026 revenue target as AI backlog surges to $73B (NASDAQ:AVGO)

Earnings Call Insights: Broadcom Inc. (AVGO) Q4 2025 Management View * Hock Tan, President, CEO & Executive Director, reported, "In our fiscal 2025, consolidated revenue grew 24% year-over-year to a record $64 billion, and it's driven by AI semiconductors and VMware. AI revenue grew 65% year-over-year to $20 billion, driving the semiconductor revenue for this This article was automatically generated by an AI tool based on content available on the Seeking Alpha website, and has not been curated or reviewed by humans. Due to inherent limitations in using AI-based tools, the accuracy, completeness, or timeliness of such articles cannot be guaranteed. This article is intended for informational purposes only. Seeking Alpha does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Broadcom's $73 billion AI backlog supports strong revenue growth over the next 18 months, making AI the primary driver of expansion. AI revenue growth is expected to lower gross margins due to product mix but increase operating margin dollars through higher operating leverage. Broadcom invests in a new Singapore packaging facility to strengthen advanced packaging and supply chain resilience as AI orders accelerate.

Broadcom Q4 Preview: After 74% Surge in 2025, Can Earnings Keep Rally Alive? - Broadcom (NASDAQ:AVGO)

Semiconductor giant Broadcom Inc (NASDAQ:AVGO) could highlight surging demand for artificial intelligence chips when the company reports fourth-quarter financial results Thursday after market close. * Broadcom stock is at critical resistance. Why did AVGO hit a new high? Here are the earnings estimates, what analysts are saying ahead of the results and the key items to watch. Earnings Estimates: Analysts expect Broadcom to report fourth-quarter revenue of $17.49 billion, up from $14.05 billion in last year's fourth quarter, according to data from Benzinga Pro. The company has beaten analyst estimates for revenue in three straight quarters and in eight of the past 10 quarters overall. Broadcom has also posted 10 straight record quarters for revenue with the amount getting higher each report. The current estimate would set a new record once again for an 11th straight quarter. Analysts expect Broadcom to report fourth-quarter earnings per share of $1.86, up from $1.42 in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in three straight quarters and in nine of the past 10 quarters overall. Guidance from the company calls for fourth-quarter revenue of $17.4 billion. Read Also: Nancy Pelosi And Dan Ives Pile Into The Same 8 AI Stocks -- What Do They See Coming? What Analysts Are Saying: Analysts have been increasing their price targets and providing bullish takes on Broadcom ahead of the quarter. JPMorgan analyst Harlan Sur sees the company reporting stronger-than-expected fourth quarter results thanks to demand for AI-related products and improvements in the non-AI semiconductor sector. The analyst maintained an Overweight rating on Broadcom ahead of the results. Sur's estimate is for AI revenue to be between $6.5 billion to $6.7 billion of quarterly revenue of around $17.5 billion. The analyst expects Broadcom to report strong first-quarter guidance with estimates of $19 billion for overall revenue and $8 billion for AI revenue. Partnerships with companies like Google could help the company going forward, according to BofA Securities analyst Vivek Arya. Arya reiterated a Buy rating on Broadcom ahead of the report and raised the price target from $400 to $460. The analyst sees strong demand from Google, Anthropic and Meta expanding and helping to power guidance and future results. Arya said Broadcom is well-positioned for increased AI-related spending. Here are other recent analyst ratings on Broadcom and their price targets: Rosenblatt: Maintained Buy rating, raised price target from $400 to $440 Oppenheimer: Maintained Outperform rating, raised rice target from $400 to $435 Susquehanna: Maintained Positive rating, raised price target from $400 to $450 Morgan Stanley: Maintained Overweight rating, raised price target from $409 to $443 Key Items to Watch: Broadcom shares have soared in 2025 and the company may need to report a beat and strong guidance to keep momentum going. A recent report links Microsoft to work with Broadcom on custom AI chips, which would see the tech giant move business from Marvell to Broadcom. In the AI-chip space, Broadcom has been winning deals with some of the biggest companies, which could help provide bullish commentary from management and strong guidance. Broadcom's third quarter saw AI revenue of $5.2 billion, which was up 63% year-over-year. Analysts see the AI revenue continuing to climb going forward. Broadcom's own estimate is for fourth quarter AI revenue of $6.2 billion. Broadcom's quarterly results could put the spotlight on the entire semiconductor sector. The stock is the largest holding in the iShares Semiconductor ETF (NASDAQ:SOXX) at 8.42% of assets, even ahead of Nvidia due to the stock surge this year. A strong report from Broadcom could boost other semiconductor stocks and ETFs going forward. AVGO Price Action: Broadcom stock is up 0.24% to $407.26 on Wednesday at publication versus a 52-week trading range of $138.10 to $407.28. Broadcom shares are up 73.7% year-to-date in 2025. Read Next: Forget Meta And Microsoft -- 'Pick And Shovel' Stocks Are The AI 'Capex Super Boom' Play AVGOBroadcom Inc$408.430.53%OverviewSOXXiShares PHLX SOX Semiconductor Sector Index Fund$314.000.58%Market News and Data brought to you by Benzinga APIs

Broadcom Boasts of $73 Billion Backlog on its AI-Chip Order Book

Company revenues grow by 24 percent during the entire year with VMware continuing to make a significant impact The battle for supremacy around the business of artificial intelligence appears to be growing faster than usage of AI models across enterprises, as we found out in this end-2025 review. After Nvidia, Google, AMD and others, now Broadcom has told its investors that it's sitting pretty with a $73 billion backlog on its AI-related orders. The company is putting all its eggs into two baskets - that of Anthropic and an unnamed customer. CEO Hock Tan told investors that Anthropic was the unnamed customer from a previous earnings call that had signed up for a $10 billion chip deal earlier in 2025. Earlier reports had claimed that this deal came from OpenAI, but turns out that wasn't the case. Now we know from the horse's mouth that the deal is for Anthropic to acquire Google's latest Ironwood tensor processing unit (TPU) being designed and distributed by Broadcom. An additional order worth $11 billion from Anthropic is scheduled for delivery in 2026, according to Tan, who clarified that it was a system sale similar to Google's deal with Anthropic. What's the company planning for 2026 "We have so many components beyond XPUs, custom accelerators in ... any AI system used by hyper-scalers that, yeah, we believe it begins to make sense to do it as a system sales and be responsible, be fully responsible for the entire system. ... This customer ... we are selling it as a system with our key components in it, and that's no different than selling a chip we certify and final ability to run as part of the whole selling process," Tan explained. An additional $1 billion order as part of a fifth XPU customer was picked up for delivery late in 2026, Tan said without giving details about who that was. "It's a fifth customer, and it's a real customer, and that will grow. "They are on a multi-year journey to their own XPUs, and let's leave it at that," he said when asked if it was OpenAI that placed the order. However, he confirmed Broadcom's recent deal with OpenAI to co-develop custom AI hardware, the fruits of which would be available in 2027. Tan revealed that the $73 billion order book included XPUs, switches DSPs, and lasers for AI data centres. All of these would be shipped over the next eighteen months, he said while confirming that they expected more bookings soon. "We have that now and in the bookings has been accelerating and, frankly, we see that bookings, not just in XPUs, but in switches, DSPs, all the other components that go into AI data centre, we have never seen bookings of the nature that what we have seen over the past three months," he said while highlighting robust interest in their recent Tomahawk 6 switch platform. Hoc Tan has a few good words for VMware too During the earnings call, Hock Tan also took time to explain that while chip development and AI were driving conversations during the year, it was the VMware division that continued to drive business results and revenues. He noted that VMware had helped Broadcom's broader 24% year-on-year increase in revenues with the company hitting $64 billion for the past 12 months. Specifically, the infrastructure software business, which is where VMware does its bit, the revenues grew by 26% in the full year to $27 billion. However, Tan warned that this growth could slow down a bit for the next fiscal year and anticipated it to be "at low double-digits."

Broadcom Pulls Back as Strong Earnings Fail to Match AI Growth Expectations | Investing.com UK

Broadcom (NASDAQ:AVGO) shares tumbled approximately 4.92% in premarket trading on December 12, 2025, falling to $386.36 as of 5:19:43 AM EST, after closing at $406.37 the previous day. The sharp decline came despite the semiconductor giant reporting strong fourth-quarter earnings that beat analyst estimates, with revenue reaching $18.015 billion and adjusted earnings per share of $1.95. The stock reversal followed CEO Hock Tan's conference call commentary that failed to satisfy investors' elevated expectations for the company's artificial intelligence business growth trajectory. Broadcom delivered impressive fourth-quarter results, with revenue of $18.015 billion representing a 28% year-over-year increase, primarily driven by a 74% surge in AI semiconductor revenue. The company posted GAAP net income of $8.518 billion and non-GAAP net income of $9.714 billion for the quarter, exceeding analyst expectations. For the first quarter of fiscal 2026, Broadcom guided revenue to approximately $19.1 billion, above the $18.5 billion analyst consensus, and projected adjusted EBITDA of 67% of revenue. However, investors were disappointed by CEO Hock Tan's cautious commentary during the earnings call. He disclosed that the company has a backlog of $73 billion in AI product orders to be shipped over the next six quarters, a figure that some investors found underwhelming given the company's momentum. Tan sought to clarify that this was a "minimum" figure and expected "much more as more orders come in," but the lack of concrete 2026 AI revenue guidance left the market wanting more. His statement that it's "hard for me to pinpoint what '26 is going to look like precisely" added to investor uncertainty. Adding to investor concerns, CEO Tan warned that total margins were narrowing due to AI product sales, despite the company's strong overall performance. The announcement of an $11 billion order from AI startup Anthropic in the fourth quarter, following a $10 billion deal in the third quarter, demonstrated robust customer demand. Additionally, Broadcom signed another customer order worth $1 billion, though the client was not identified. While Tan stated that AI semiconductor revenue would double to $8.2 billion in the first quarter compared to the prior year, driven by custom AI accelerators and Ethernet AI switches, the margin pressure commentary tempered enthusiasm. The market reaction reflected a broader challenge for high-flying AI stocks: meeting increasingly lofty expectations. Broadcom's year-to-date return of 76.53% had significantly outpaced the S&P 500's 17.33% gain, and the stock had surged 123.99% over the past year. With a market capitalization of $1.919 trillion and a forward P/E ratio of 43.29, investors had priced in substantial growth expectations. The company's decision to increase its quarterly dividend by 10% to $0.65 per share and its strong free cash flow of $26.9 billion for fiscal 2025 were overshadowed by the uncertain AI revenue trajectory and margin dynamics that emerged from the earnings call. *** Looking to start your trading day ahead of the curve?

Broadcom reports upbeat guidance, sees Q1 chip revenue doubling amid AI boost By Investing.com

Investing.com - Broadcom on Thursday reported upbeat guidance for the current quarter, forecasting AI-chip revenue to doubled in Q1 from a year earlier just as the chipmaker delivered fiscal fourth-quarter results that topped Wall Street estimates. Broadcom Inc (NASDAQ:AVGO) jumped more than 3% in afterhours following the report. First quarter revenue was guided to about $19.1B, beating analyst estimates $18.31B. "We see the momentum continuing in Q1 and expect AI semiconductor revenue to double year-over-year to $8.2 billion, driven by custom AI accelerators and Ethernet AI switches," the company said. Broadcom announced fiscal Q4 adjusted earnings per share of $1.95 on revenue of $18.02 billion. Analysts polled by Investing.com anticipated EPS of $1.87 on revenue of $17.45 billion. The beat on top and bottom lines comes as AI semiconductor jumped to $8.3B, beating the company's previously provided guidance of $6.2B. Semiconductor solutions, its core business, rose 35% to $11.07B, while infrastructure software added 19% to $6.94B.

Broadcom sees dip in quarterly margins due to AI, shares fall

Dec 11 (Reuters) - Broadcom projected first-quarter revenue above Wall Street estimates on Thursday, but said that margins would fall due to a higher mix of AI revenue, and shares fell 5% in extended trading. Broadcom has jumped into the AI chip business, which has investors nervous about the profitability and costs of enormous investments. The company has a backlog of $73 billion that it anticipates shipping over the next 18 months, CEO Hock Tan said on a post-earnings call, but his lieutenant said profit margins could drop. "We expect first-quarter consolidated gross margin to be down approximately 100 basis points sequentially, primarily reflecting a higher mix of AI revenue," CFO Kirsten Spears said on the call. The margins will be affected throughout the year by the revenue mix of infrastructure, software and semiconductors. Broadcom's AI customer concentration, coupled with future lower margins for AI system sales, drove the drop in shares, according to Kinngai Chan, senior research analyst at Summit Insights. The backlog "is still coming from only five customers and includes systems, which have a higher price tag. System sales will carry lower gross margin and ... are expected to become a larger part of total sales in the future quarters, namely the second half of fiscal 2026," he said. The decline in gross margins may raise a concern that costs related to contract chip manufacturer TSMC may squeeze the value Broadcom can realize from its custom AI processors business, according to Gil Luria, analyst at D.A. Davidson. Broadcom works with hyperscale cloud providers such as Google and Meta Platforms to design and manufacture the processors, known as ASICs, offering a key alternative to Nvidia's graphics processing units. Big U.S. cloud providers are expected to spend more than $400 billion on AI this year to build out data centers needed to support services such as ChatGPT, Copilot and Gemini. But the growing spending, limited evidence of real-world AI productivity gains, soaring valuations and a web of circular investments have stoked fears of an AI bubble. Tan said in a statement that Broadcom's AI semiconductor revenue -- encompassing both the custom chips and networking chips used in AI data centers -- is expected to double to $8.2 billion in the fiscal first quarter. Broadcom forecast quarterly revenue of about $19.1 billion, compared with analysts' average estimate of $18.27 billion, according to data compiled by LSEG. The company reported revenue of $18.02 billion for the fourth quarter ended November 2, compared with estimates of $17.49 billion. (Reporting by Juby Babu in Mexico City; Editing by Maju Samuel and Alan Barona)

Broadcom beats expectations, forecasting a surge in AI chip sales

On Thursday Broadcom posted quarterly results that topped forecasts, alongside upbeat guidance driven by sustained demand in artificial intelligence. EPS reached $1.95 for Q4, versus $1.86 expected by the LSEG consensus. Revenue reached $18.02bn, well above the projected $17.49bn. Broadcom's shares rose nearly 3% in after-hours trading. For Q1 2026, the company expects revenue of $19.1bn, well ahead of market expectations. CEO Hock Tan said sales of chips dedicated to artificial intelligence should double in a year, reaching $8.2bn. The momentum includes both specialized semiconductors for AI models and chips used in the network infrastructure essential to their operation.