Broadcom Earnings Point To AI-Led Upside
Broadcom earnings showed a $73.0B AI backlog supporting FY2026 guidance and prompted traders to reweight AI semiconductor exposure ahead of March earnings.
KEY TAKEAWAYS
- Q4 FY2025 revenue was $18.0B and non-GAAP EPS $1.95, beating consensus.
- Management reported a $73.0B AI backlog tied to hyperscalers but called it a moving target.
- Q1 FY2026 guidance projects $19.1B revenue and $8.2B AI semiconductor revenue, signaling FY2026 growth.
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Broadcom earnings highlighted a record AI franchise and a multibillion-dollar backlog that management says could sustain growth through fiscal 2026, reshaping investor expectations ahead of the company’s March 4, 2026, earnings update.
Quarter Results and Guidance
Broadcom Inc. (AVGO) reported fourth-quarter fiscal 2025 revenue of $18.0 billion, up 28.0% year over year and exceeding consensus estimates. Non-GAAP earnings per share reached $1.95, also above expectations. For the first quarter of fiscal 2026, the company guided to total revenue of $19.1 billion, projecting AI semiconductor revenue to double to $8.2 billion and infrastructure software growth in the low double digits.
AI Revenue, Backlog, and Profitability
Broadcom’s AI business generated $20.0 billion in revenue for fiscal 2025, a 65.0% increase from the prior year. Management reported an AI backlog of $73.0 billion tied to custom XPUs, switches, and optical components from five major hyperscalers, including Google, Meta, and OpenAI. The company described this backlog as a moving target rather than guaranteed near-term shipments. Total backlog stood at $162.0 billion.
Executives said bookings over the past three months were unprecedented, supporting the company’s optimistic near-term guidance. The AI networking backlog includes $10.0 billion in demand for the Tomahawk 6 switch, which delivers roughly 102 terabits per second of throughput. Customer orders also included about $21.0 billion for the Ironwood chip family from Google and Anthropic. Analysts note that this concentration raises the risk that backlog conversion could be affected if hyperscalers shift toward in-sourcing.
Broadcom’s semiconductor revenue reached a record $37.0 billion in fiscal 2025, with adjusted EBITDA, a proxy for operating profit, rising 34.0% year over year to $12.1 billion. Analysts expect earnings per share to grow roughly 54.5% in fiscal 2026, with some projecting free cash flow to increase from $26.9 billion in fiscal 2025 to about $107.0 billion by fiscal 2029. Insider transactions in December 2025 included sales of 130,000 shares by the chief executive and 391,000 shares by a director.
Investors will assess execution and backlog conversion at the company’s March earnings update.
