Broadcom Slides 19% Since Earnings as Analysts Lift Targets and Back AI Outlook

Analysts say the drop reflects worry over a near‑term margin dip tied to a shift toward lower‑margin full‑rack AI systems.

Overview

Shares are down more than 19% since Broadcom’s Dec. 11 fiscal Q4 report despite a top‑ and bottom‑line beat driven by AI demand.
Q4 revenue was about $18.02 billion, up roughly 28% year over year, as AI semiconductor revenue rose about 74% from a year earlier.
Management guided Q1 2026 revenue to roughly $19.1 billion with adjusted EBITDA at about 67% of revenue and projected AI business of around $8.2 billion, more than doubling year over year.
Investors focused on an expected roughly 100‑basis‑point gross‑margin compression due to a greater mix of full‑rack systems that include third‑party components.
Sell‑side firms defended the stock, with Truist raising its price target to $510, UBS lifting to $475 and calling the pullback an overreaction, and Morgan Stanley reiterating Buy with a $462 target, while TV host Jim Cramer urged buying on confidence in CEO Hock Tan.