Broadcom Earnings Preview AI Backlog Fuels Guidance

Broadcom (AVGO) reports earnings after markets close on March 4, 2026, testing whether management’s AI-driven guidance and a large AI backlog can sustain recent revenue growth.

Upcoming Earnings and Guidance

Management projects first-quarter fiscal 2026 revenue of $19.1 billion, a 28.0% increase year-over-year, with AI semiconductor sales doubling to $8.2 billion. This growth is driven by custom AI accelerators and Ethernet AI switches. In the prior quarter, Broadcom posted record fourth-quarter revenue of $18.0 billion, also up 28.0% year-over-year. AI semiconductor revenue rose 74.0% to an implied $6.2 billion, while free cash flow reached $7.47 billion.

AI Backlog and Market Targets

For fiscal 2025, Broadcom reported consolidated revenue of $64.0 billion, up 24.0% year-over-year, with AI semiconductor sales totaling $20.0 billion, a 65.0% increase. Infrastructure software revenue reached $27.0 billion, carrying a 93.0% gross margin. Free cash flow for the year was $26.9 billion, up 39.0%.

At the end of fiscal 2025 in November, the company held a total backlog of $162.0 billion, including a $73.0 billion AI semiconductor backlog that management expects to clear over the next six quarters. This AI backlog supports near-term revenue visibility.

Broadcom’s custom AI-chip customers include Google, Meta, OpenAI, Anthropic, and one undisclosed client. The company forecasts AI semiconductor revenue of $60.0 billion to $90.0 billion in fiscal 2027 from three of its largest hyperscaler customers, excluding Anthropic and the fifth client.

Analysts project fiscal 2026 revenue of $97.6 billion and second-quarter revenue near $21.0 billion. Separate models estimate AI networking revenue at about $17.0 billion for fiscal 2026 and $30.0 billion for fiscal 2027. Some analysts warn that growth in lower-margin XPU sales and a flat or declining non-AI semiconductor base could pressure gross margins.

Broadcom stock faces a valuation debate, with analyst price targets clustering around $449–$454. On March 2, one major bank lowered its target to $450 while maintaining a Buy rating, and another cut its rating to sector perform. In 2026, Broadcom raised its quarterly dividend 10.0% to $0.65 per share, following strong free cash flow.

The upcoming report will provide an early indication of whether management’s guidance and the sizable AI backlog translate into sustained shipments and revenue, with backlog clearance over the next six quarters as the key test of durability.