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Broadcom Shares Dip 5% Despite Beating Earnings Estimates

Broadcom stock slides as AI outlook misses lofty expectations. Here’s our breakdown of their targets and what it means for your portfolio.

Rendy Andriyanto

Rendy Andriyanto

— 2 min read
Broadcom Shares Dip 5% Despite Beating Earnings Estimates

Jakarta, Gotrade News - Shares of Broadcom Inc. took a hit even though their financial report actually beat analyst estimates. The drop happened mainly because the company's AI sales outlook just didn't meet the sky-high expectations of investors.

Key Takeaways:

  • Broadcom's $73 billion AI backlog is huge, but still left the market wanting more.
  • Fiscal Q1 revenue is projected at $19.1 billion, beating analyst estimates.
  • Strategic partnerships with Anthropic and Google remain key drivers for long-term growth.

Broadcom CEO Hock Tan mentioned a massive AI product backlog of $73 billion for the next six quarters. According to a report from Bloomberg, this figure actually disappointed some investors who were hoping for way more aggressive growth numbers.

The Reality Behind the Hype

Investors are craving more clarity on exactly when the company will see the full payoff from their AI investments. As explained by Hock Tan in the conference call, he refrained from giving specific revenue guidance for 2026, keeping things a bit vague.

Despite the market reaction, the company's fiscal fourth-quarter performance was actually pretty solid. Based on data compiled by Bloomberg, sales revenue hit $19.1 billion, which comfortably beat the average analyst estimates.

Big Partnerships Driving Valuation

The positive sentiment we saw earlier was fueled by Broadcom's tight relationships with the world's biggest AI model providers. The company secured a massive $11 billion order from AI startup Anthropic just last quarter.

Broadcom is also known to be working with Alphabet Inc. on highly profitable cloud-based computing services. CEO Hock Tan stands to gain a huge stock payout if these long-term AI revenue targets are hit.

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Disclaimer

Gotrade is the trading name of Gotrade Securities Inc., registered with and supervised by the Labuan Financial Services Authority (LFSA). This content is for educational purposes only and does not constitute financial advice. Always do your own research (DYOR) before investing.

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