Why Broadcom Shares Fell After a Strong Earnings Report

Broadcom reported solid Q4 results Thursday, beating Wall Street estimates on earnings and revenue while guiding for more AI growth ahead. Stock rose at first in after-hours trading, then dropped as much as 5%, according to Bloomberg and Yahoo Finance. Investors wanted bigger details on AI customers and future sales.

The Numbers That Beat Expectations

Broadcom posted adjusted earnings of $1.95 per share, above the $1.86 analysts expected. Revenue hit $18.02 billion, topping the $17.49 billion forecast, CNBC reports.

First-quarter revenue outlook: $19.1 billion, up 28% year-over-year and above the $18.3 billion average estimate.
AI chip sales expected to double year-over-year to $8.2 billion next quarter.
Net income jumped 97% to $8.51 billion.
Quarterly dividend raised to 65 cents per share from 59 cents.

AI drove much of the growth, with semiconductor solutions up 22% to $11.07 billion and infrastructure software up 26% to $6.94 billion.

What Disappointed Investors

CEO Hock Tan named Anthropic as the mystery $10 billion customer from last quarter and revealed an $11 billion follow-up order. But the fifth new customer only placed a $1 billion order for delivery in late 2026—small compared to prior deals, Sherwood News notes, lacking the big customer surprises of past quarters that drove huge gains before, 24/7 Wall St. reports. Tan called the backlog $73 billion over the next 18 months a “minimum,” yet some saw it as light.

No full-year 2026 AI revenue forecast came either. Tan said demand changes too fast and skipped guidance. AI sales mix also means narrower margins versus higher-profit software, he added. Questions arose on customers possibly cutting Broadcom out of high-margin design work.

This landed after recent AI stock weakness, like Oracle’s report. Broadcom shares, up 75% in 2025, couldn’t spark a rebound, Investopedia says.