Broadcom Q4: AI Deals, Cloud Moves, and a Lot to Prove

Reporting Date: Thursday, Dec 12, 2025 (AMC)
Dubai Time: Early Friday, December 13

Broadcom enters earnings season with soaring investor enthusiasm, fueled by accelerating AI semiconductor demand, surging XPU orders, and robust VMware integration. The company’s record backlog of $110 billion sets a strong foundation, but with the stock trading at ~96× trailing earnings, expectations are high.

Wall Street will be watching whether Broadcom can extend its 10-quarter AI growth streak, convert a $10B fourth customer order into revenue traction, and manage margin stability amid rising XPU demand and infrastructure scaling.

Core Metrics Snapshot

Sources: AVGO Investor Relations, Refinitiv

Three Key Pressure Points

Margin Dynamics in an AI-Heavy Mix

AI semiconductor revenue is projected to rise 66% YoY, driven by XPU wins and hyperscaler demand. However, the shift toward custom accelerators like XPUs could mix down gross margins, even as topline growth accelerates. Operating margin is forecast to shrink ~16 points YoY, reflecting increased infrastructure and product costs.

Lofty Valuation = Little Room for Error

With a forward P/E of 40–52× and trailing P/E near 96×, Broadcom trades at a steep premium. While analysts expect earnings growth of 38–41% in FY2026, the current price embeds much of that future performance. Any earnings miss or guidance cut could trigger a sharp repricing.

Turning Backlog into Revenue

The $110B backlog (half AI semis) signals strong demand, but attention is shifting to delivery speed. Investors will look for signs that Broadcom can turn those multi-year bookings - especially the $10B+ XPU order -into revenue. Since the $110B figure is from Q3, any Q4 update will be closely scrutinized.

Analyst & Investor Sentiment

Analyst Consensus

• Rating: Strong Buy (27 Buy, 2 Hold, 0 Sell)
• Smart Score: 10/10 – Outperform (TipRanks)

Client Positioning:

• 75% Long, 25% Short (251–500 clients)
• Today: 100% Sells (likely pre-earnings hedging)
• Week/Month: 64% Buys

Traders remain bullish, and positioning is net long - though short-term selling suggests caution ahead of earnings.

Market Buzz & Headlines

• VMware hits $6.8B revenue with 93% margin, showing software strength.
• CEO Hock Tan stays through 2030, ensuring leadership stability.
• Google’s Gemini 3 uses Broadcom chips, reportedly 40% more efficient than NVIDIA’s.
• Goldman Sachs price target hike (Nov 26) pushes shares to record high.
• New high-speed data center switches launched (Nov 19).
• Quantum-safe SAN switch portfolio introduced, boosting secure infrastructure play.

All in all, Broadcom’s recent headlines show it’s not just riding the AI wave - it’s expanding its reach across software, data centers, and enterprise infrastructure, with strong support from Wall Street to match. It’s a solid setup heading into earnings.

Peer Snapshot & Valuation

Sources: AVGO Investor Relations, Refinitiv

Broadcom’s solid earnings growth (+31.7%) and strategic AI-software positioning continue to attract investor attention. But with a lofty P/E of 95.66× and one of the highest debt loads in the group (D/E 87.7%), the bar for execution is high. Compared to high-fliers like NVIDIA (with faster growth and superior profitability) Broadcom comes across as more measured: not as explosive, but steadier, supported by recurring software revenue and a massive AI-driven backlog.

Technical Setup

Broadcom is currently trading around $380.61, with YTD gains of 64.2%.

Broadcom is pulling back from the upper boundary of its rising channel now holding above the key $375–$380 support zone. The price is now hovering just above the mid-channel area, and a sustained move below $375 could expose the lower channel trendline near $345-350. For now, the broader uptrend structure remains intact, but momentum has clearly cooled as the RSI retreats from overbought territory.

Why This Matters

Broadcom enters earnings with huge expectations: strong AI sales, VMware integration, and a new $10B customer. But with a sky-high multiple and softening margins, it must deliver near-flawless execution. 

Broadcom’s Q4 results will test whether its explosive AI growth and massive backlog can sustain earnings momentum despite rising costs and a premium valuation. Success would cement its leadership in AI infrastructure; failure may prompt a reset in investor expectations. For investors, the question is whether the future growth is already priced in.