Broadcom (AVGO) Stock Overview Pre-market, Broadcom shares dropped 4. 5%, trading at $406 on Dec. 11, slightly below its 52-week high of $415 and analyst price target of $412. Earnings and Guidance Broadcom posted a strong Q4 with earnings of $1. 95 per share on $18 billion revenue, beating estimates. It forecasted Q1 revenue at $19. 1 billion, a 28% year-over-year increase, well above Wall Street’s $18. 3 billion projection. CEO Hock Tan highlighted AI chip revenue is expected to double to $8. 2 billion this quarter. Despite the beat, AVGO stock declined during the earnings call due to concerns over long-term margin pressures. Broadcom disclosed a $73 billion AI-related backlog over 18 months, though much of it stems from lower-margin system sales rather than high-margin chip sales. Management revealed Anthropic as the unnamed fourth customer with a $10 billion order for Google’s tensor processing units and announced a fifth custom chip customer without details. Market Reaction and Profitability Concerns Investors seem focused on margin compression risks. Broadcom’s move into full rack systems sales, which involve third-party components, will compress gross margins, as CFO Kirsten Spears acknowledged. Operating leverage may partially offset margin pressures, though no specific targets were given. Despite this, the stock is up over 71% year-to-date, benefiting from AI spending alongside Nvidia.

Broadcom wins major clients like Google, Meta, and Anthropic, confirming its strategy to offer custom chips as GPU alternatives. The $73 billion backlog assures strong revenue visibility and is expected to grow. Dividend and Outlook Broadcom boosted its quarterly dividend by 10% to $0. 65, marking the 15th consecutive annual increase. Investors should watch if AVGO can maintain its premium valuation amid shifting business mix and margin pressures forecasted for fiscal 2026. Valuation and Tools TIKR’s free Valuation Model enables quick estimation of a stock’s potential price by inputting revenue growth, operating margins, and exit P/E multiples, using analyst consensus as default. It calculates share price and returns under Bull, Base, and Bear scenarios to assess valuation. Additional Resources TIKR provides access to billionaire investors’ holdings and screening of over 100, 000 global stocks for new opportunities. Their platform aids fast, comprehensive analysis. Disclaimer Content provided is informational and not investment advice or stock recommendations. Data is based on TIKR Terminal estimates and may not reflect recent developments. TIKR holds no positions in mentioned stocks. Investors should conduct their own research.