Broadcom Stock Tumbles 5% on News of Missing Q4 AI Earnings Forecast

In Focus

• Broadcom reported $73 billion in AI product orders
• The company’s tightening profit margins disappointed investors
• The chipmaker’s total Q4 revenue amounted to $18 billion

News of Broadcom’s missing AI earnings outlook caused the company’s stock to plunge 5% on December 11, 2025. According to Yahoo Finance, the drop was triggered by CEO Hock Tan’s comment that the company currently has a backlog of $73 billion in AI product orders to be shipped in the next six quarters. The company attempted to clarify the backlog, saying it expects more orders.

“We do expect much more as more orders come in for shipments within that next six quarters. So our lead time, depending on the particular product it is, can be anywhere from six months to a year,” Tan said as stated by Yahoo Finance.

Investor Focus on AI Payoff

The recent Broadcom stock slide follows a period of consistent gain. During the earnings call, investors expected to hear when the company’s AI investment will start paying off. Contrary to this expectation, Broadcom provided a vague timeline and failed to give guidance for its 2026 AI revenue. Instead, the company termed the revenue forecast a moving target.

“It’s hard for me to pinpoint what ’26 is going to look like precisely. So I’d rather not give you guys any guidance,” Tan added as per Yahoo Finance.

Broadcom’s total Q4 revenue amounted to $18 billion, against the $17.5 billion projected by analysts. The company’s total revenue guidance for Q1, which ends on February 1, 2026, stood at $19.1 billion, compared to the $18.5 estimated by analysts. The company also reported $1.95 in earnings per share, against the $1.87 expected by analysts. Broadcom beat Q1 revenue estimates in July 2025 after reporting revenue of $15 billion in the second quarter.

Tightening Profit Margin

Broadcom’s earnings call also pointed to tightening profit margins, which further disappointed investors. While CEO Tan reported that Broadcom had bagged an $11 billion order from Anthropic in Q4, he said that its total profit margins were narrowing due to AI product sales.

The Anthropic order followed a $10 billion deal that the company signed in the third-quarter with the AI firm. The company also reported signing another $1 billion order with a new client, but did not reveal the name.

Broadcom has benefited from rising demand for its custom chips as it takes on NVIDIA. Earlier this year, Broadcom partnered with OpenAI to design and produce custom AI chips for the AI firm.

In July 2025, the company launched the Tomahawk Ultra Ethernet switch, which is designed to improve AI workloads and support high-performance computing (HPC). Broadcom expects revenue from its chip business to double to a high of $8.2 billion in the first quarter.