Where Will Broadcom Stock Be in 1 Year?

• Broadcom banal has pulled backmost sharply aft its latest quarterly results.

• Investors are acrophobic astir the deficiency of clarity regarding its caller fiscal year.

• However, don't beryllium amazed to spot Broadcom overcoming the caller negativity.

• 10 stocks we similar amended than Broadcom ›

Broadcom (NASDAQ: AVGO) has turned retired to beryllium a coagulated concern successful the past year, arsenic shares of the semiconductor specializer person jumped 52% during this period, owing to its increasing power successful the marketplace for artificial quality (AI) chips.

However, investors weren't satisfied with Broadcom's latest quarterly report. The banal fell much than 11% aft releasing its fiscal 2025 fourth-quarter results (for the 4th ended Nov. 2) connected Dec. 11.

Let's spot wherefore that was the case, and cheque if the deed this semiconductor banal has taken going into 2026 volition person an interaction connected its show successful the coming year.

Broadcom reported fiscal Q4 gross of a grounds $18 billion, up by 28% from the year-ago period. Non-GAAP (generally accepted accounting principles) net changeable up by 37% twelvemonth implicit twelvemonth to $1.95 per share. Wall Street would person settled for $1.87 per stock successful net connected gross of $17.5 billion, and the institution easy cruised past those expectations.

Even the guidance was solid. Broadcom expects $19.1 cardinal successful gross successful the existent quarter, higher than the $18.5 cardinal statement estimate. The guidance points toward a steadfast year-over-year summation of 28% successful revenue. However, investors look to beryllium acrophobic astir a mates of factors.

First, absorption pointed retired that the summation successful Broadcom's AI gross is compressing its margins. As a result, the institution expects its fiscal Q1 gross borderline to autumn by 100 ground points connected a sequential basis. Management added that Broadcom's gross margins are apt to beryllium impacted by the higher AI merchandise mix.

Second, Broadcom's AI bid backlog of $73 cardinal (which it expects to fulfill implicit the adjacent six quarters) and management's reluctance to supply full-year guidance look to person dented capitalist confidence. After all, Broadcom reported a overmuch bigger backlog of $110 cardinal astatine the extremity of fiscal Q3. Moreover, investors would person wanted much clarity astir the imaginable maturation that it could present for the entirety of the caller fiscal year.

That's not surprising, arsenic Broadcom is trading astatine an costly 26 times income and 71 times trailing earnings. So, the imaginable driblet successful Broadcom's margins and the deficiency of a important acceleration successful maturation successful fiscal Q1, arsenic compared to its show past quarter, haven't gone down good with investors.