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Broadcom Shares Slide After Q4 Beat as Cautious AI Outlook and Profit Headwinds Hit Sentiment

Cautious margin guidance alongside a higher 2026 tax rate overshadowed the company’s record AI demand.

Overview

  • Broadcom beat fiscal Q4 expectations with $18.02 billion in revenue and adjusted EPS of $1.95, yet the stock fell as much as 8–9% during Friday trading.
  • CEO Hock Tan disclosed a $73 billion AI backlog to be delivered over roughly six quarters but declined to give 2026 AI revenue guidance, calling it a moving target.
  • Management guided fiscal Q1 revenue to about $19.1 billion and projected AI semiconductor revenue of $8.2 billion, roughly double year over year.
  • CFO Kirsten Spears warned gross margins will compress by about 100 basis points in Q1 and said the adjusted tax rate is expected to rise to roughly 16.5% in 2026.
  • The company raised its quarterly dividend by 10%, but shares fell sharply and chip peers weakened as investors prioritized visibility and profitability concerns over the strong prints.