Where Will Broadcom Stock Be in 1 Year?

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Where Will Broadcom Stock Be in 1 Year?


  • Broadcom stock has pulled back sharply after its latest quarterly results.

  • Investors are concerned about the lack of clarity regarding its new fiscal year.

  • However, don’t be surprised to see Broadcom overcoming the recent negativity.

  • 10 stocks we like better than Broadcom ›

Broadcom (NASDAQ: AVGO) has turned out to be a solid investment in the past year, as shares of the semiconductor specialist have jumped 52% during this period, owing to its growing influence in the market for artificial intelligence (AI) chips.

However, investors weren’t satisfied with Broadcom’s latest quarterly report. The stock fell more than 11% after releasing its fiscal 2025 fourth-quarter results (for the quarter ended Nov. 2) on Dec. 11.

Let’s see why that was the case, and check if the hit this semiconductor stock has taken going into 2026 will have an impact on its performance in the coming year.

Person in suit with folded hands looking at a monitor.
Image source: Getty Images.

Broadcom reported fiscal Q4 revenue of a record $18 billion, up by 28% from the year-ago period. Non-GAAP (generally accepted accounting principles) earnings shot up by 37% year over year to $1.95 per share. Wall Street would have settled for $1.87 per share in earnings on revenue of $17.5 billion, and the company easily cruised past those expectations.

Even the guidance was solid. Broadcom expects $19.1 billion in revenue in the current quarter, higher than the $18.5 billion consensus estimate. The guidance points toward a healthy year-over-year increase of 28% in revenue. However, investors seem to be concerned about a couple of factors.

First, management pointed out that the increase in Broadcom’s AI revenue is compressing its margins. As a result, the company expects its fiscal Q1 gross margin to fall by 100 basis points on a sequential basis. Management added that Broadcom’s gross margins are likely to be impacted by the higher AI product mix.

Second, Broadcom’s AI order backlog of $73 billion (which it expects to fulfill over the next six quarters) and management’s reluctance to provide full-year guidance seem to have dented investor confidence. After all, Broadcom reported a much bigger backlog of $110 billion at the end of fiscal Q3. Moreover, investors would have wanted more clarity about the potential growth that it could deliver for the entirety of the new fiscal year.

That’s not surprising, as Broadcom is trading at an expensive 26 times sales and 71 times trailing earnings. So, the potential drop in Broadcom’s margins and the lack of a significant acceleration in growth in fiscal Q1, as compared to its performance last quarter, haven’t gone down well with investors.

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