SAN JOSE, California, December 12, 2025 – Broadcom reported fourth-quarter results that exceeded analyst expectations on Friday, with revenue climbing 28% to $18.02 billion and adjusted earnings per share of $1.95, but the stock still fell 11% in a broader retreat from AI infrastructure investments.
The decline marked Broadcom’s sharpest single-day drop since January, dragging down peers including Nvidia, down 3%, AMD , off 5%, and Oracle, which slid 4.5% following its own earnings miss. The Nasdaq Composite lost 1.69%, while the S&P 500 dipped 1%, as investors weighed signs of fatigue in the AI boom despite robust demand signals.
AI semiconductor sales drove the quarter’s strength, surging 74% year-over-year, though Broadcom did not break out the figure within total revenue.
CEO Hock Tan credited custom AI accelerators and networking chips supplied to clients like Google, Meta, and Anthropic, which contributed to a $73 billion AI order backlog spanning 18 months, including a $21 billion commitment from Anthropic.
Guidance called for AI revenue to double year-over-year to $8.2 billion in the current quarter. Tan tempered near-term prospects for a major OpenAI deal, saying, “We do not expect much in ’26.”
Chief Financial Officer Kirsten Spears noted potential gross margin compression from elevated costs in server rack production, which bundle more components per unit.
Analysts largely viewed the sell-off as disconnected from fundamentals. Mizuho’s Vijay Rakesh raised his price target to $450 from $435, labeling Broadcom “still where the growth is” as a supplier to leading AI developers, including potential future OpenAI work.
Bernstein’s Stacy Rasgon recommended buying the dip, stating the AI story “continues to not only overdeliver but is doing it at an accelerating rate.”
Broadcom shares, up 78% for the year, closed near $360. The reaction echoed volatility in AI-related stocks, such as CoreWeave’s 10% drop, amid questions about hyperscaler spending sustainability.
With a $73 billion pipeline, Broadcom signals enduring AI demand, but the sector’s pullback highlights risks from rapid valuations and execution pressures.
