Broadcom Inc. (NASDAQ: AVGO) ended Friday, December 12, 2025, sharply lower after investors digested the company’s latest earnings and—more importantly—its warning that booming AI-related sales could pressure margins. At the close, AVGO finished around $359, and in early extended trading it hovered near $360 with only a small move after the bell. [1]
One important calendar note up front: December 13, 2025 is a Saturday, and U.S. stock markets are not open for a regular session. The “before the market open” focus therefore shifts to the next regular session on Monday, December 15, 2025 (and any weekend headlines or analyst notes that may shape sentiment).
Below is what happened after the bell on 12/12/2025, what the latest news and analysis dated 12/12/2025 is emphasizing, and a practical checklist of what investors are watching heading into the next open.
What Broadcom stock did after the bell on 12/12/2025
Broadcom shares closed down roughly 11% on Friday, and the after-hours tape was relatively calm in the minutes following the closing bell. MarketBeat data showed a closing print around $359.37 and extended-hours trading around $360.12 shortly afterward. [2]
The size of Friday’s drop matters because it reframed the market’s interpretation of Broadcom’s AI story: the company delivered strong results, but traders focused on profitability—not just growth—and the stock’s decline was large enough that Reuters said the move implied a potential market-value hit of more than $200 billion if losses held. [3]
Why AVGO fell despite a headline earnings beat
1) The market is suddenly obsessed with AI profitability, not just AI revenue
Reuters’ read of the selloff was blunt: Broadcom warned that a growing mix of lower-margin custom AI processors could squeeze profitability, and that reignited broader “AI payoff” worries after a period of extremely strong AI-linked stock performance. [4]
Axios captured the same shift in investor psychology: the market is increasingly rewarding efficiency in AI spending rather than simply applauding big capital outlays—and that dynamic has weighed on AI leaders and their suppliers. [5]
2) Broadcom explicitly guided to gross-margin pressure
On the earnings call, Broadcom’s CFO Kirsten Spears said the company expects Q1 consolidated gross margin down ~100 basis points sequentially, “primarily reflecting a higher mix of AI revenue.” [6]
Later in the Q&A, management gave more color on why AI can dilute gross margin: as Broadcom sells more systems/rack-level solutions and passes through more third-party component costs, gross margin percentage can fall even if gross margin dollars rise—and operating leverage is expected to help protect operating profitability. [7]
3) The “AI backlog” number impressed… but also raised questions
Broadcom repeatedly pointed to an AI order backlog of more than $73 billion expected to be delivered over the next 18 months. [8]
But Reuters also highlighted a key investor concern: that backlog is concentrated, with much of it tied to just five customers, and analysts debated how mix, systems sales, and foundry costs could influence future margins. [9]
The key numbers from Broadcom’s results and guidance (what moved the stock)
From Broadcom’s results announcement:
- Q4 revenue:$18,015 million, up 28% year over year
- Non-GAAP diluted EPS:$1.95 (GAAP diluted EPS $1.74)
- Adjusted EBITDA:$12,218 million, or 68% of revenue
- Free cash flow:$7,466 million (41% of revenue)
- Dividend: quarterly dividend raised 10% to $0.65/share
- Q1 FY2026 guidance: revenue of approximately $19.1 billion; Adjusted EBITDA ~67% of projected revenue [10]
Broadcom also disclosed dividend timing: the $0.65/share dividend is payable Dec. 31, 2025 to shareholders of record as of Dec. 22, 2025. [11]
On the AI side, CEO Hock Tan said AI semiconductor revenue increased 74% YoY, and the company expects AI semiconductor revenue to double YoY to $8.2 billion in the current quarter, driven by custom AI accelerators and Ethernet AI switches. [12]
Separately, the earnings-call transcript shows Broadcom described FY2025 AI revenue of $20 billion, up 65% YoY, underscoring just how central AI has become to the company’s growth narrative. [13]
What’s inside the $73B AI backlog—and why it matters
Broadcom’s earnings-call transcript provides crucial texture: management described record orders spanning XPUs (custom accelerators) plus DSPs, optical components (like lasers), and PCIe switches—together totaling more than $73B in AI backlog, and noted this figure is “almost half” of Broadcom’s broader consolidated backlog cited on the call. [14]
In a market that has started to discount “AI hype,” backlog has become a proxy for visibility—but it also magnifies scrutiny around:
- Customer concentration risk (a handful of buyers can drive results) [15]
- Mix shift risk (systems and pass-through components can dilute gross margin) [16]
- Conversion timing (orders recognized over future quarters can shift expectations and volatility)
Broader market context on 12/12: Broadcom didn’t sell off alone
Broadcom’s move landed in a market already nervous about AI valuations and the return on massive AI infrastructure spending.
- Reuters pointed to growing “AI bubble” debate and noted that scrutiny of AI spending has intensified after a strong tech rally and concerns about “circular deals.” [17]
- Axios argued investors are now punishing the “AI elite” for inefficient spending, pressuring not only Oracle and Broadcom but also Nvidia by association. [18]
- The Financial Times reported U.S. tech stocks fell sharply, with Broadcom’s drop one of the main drags on the Nasdaq on Friday. [19]
The takeaway: even very strong earnings can be treated as “not good enough” when a stock (and a whole theme) is priced for near-perfection.
Analyst forecasts and price targets (as of 12/12/2025)
Despite the drawdown, analysts broadly remained constructive—many kept “buy”-type ratings and some raised price targets after the report.
StockAnalysis’ compiled analyst updates dated Dec. 12, 2025 show multiple firms hiking targets, including examples such as:
- Citigroup:$415 → $480 (maintains Strong Buy)
- Barclays:$450 → $500 (maintains Buy)
- JPMorgan:$400 → $475 (maintains Buy)
- Morgan Stanley:$443 → $462 (maintains Buy)
- TD Cowen:$405 → $450 (maintains Strong Buy) [20]
That same snapshot showed a “Strong Buy” consensus and an average 12‑month price target around the mid‑$300s to $400 range (with a wide spread between low and high targets). [21]
Meanwhile, Investopedia reported that analysts tracked by Visible Alpha were still broadly positive on the name even as the “AI trade” slid on Friday. [22]
How to interpret this: Friday’s price action looked like an “expectations reset” rather than a sudden collapse in the long-term AI thesis—but it did elevate the importance of margins, mix, and disclosure.
What to know before the next market open (weekend into Monday, 12/15/2025)
Because 12/13/2025 is Saturday, there’s no regular-session open to trade AVGO. But the weekend can still shape Monday’s tape through headlines, analyst notes, and positioning. Here’s what investors will likely focus on:
1) Whether “margin dilution” is a temporary optics issue—or a multi-quarter reality
Broadcom framed the margin pressure as a mix shift tied to AI, and emphasized operating leverage. The market’s next question is how far gross margin could compress as system/rack revenue grows. [23]
2) Clarity on AI customers and the backlog build
Broadcom has highlighted massive AI backlog and accelerating AI revenue, but the market is now demanding clearer visibility into:
- the pace of backlog conversion,
- the balance between custom accelerators vs. networking vs. systems,
- and how concentrated demand is among a small set of hyperscalers and AI partners. [24]
3) The “AI trade” temperature check across the sector
Broadcom’s drop fed into a broader AI pullback narrative (Oracle, Nvidia, and other AI-linked names also moved in sympathy). If broader risk appetite improves Monday, AVGO can stabilize; if not, the stock may continue to trade like a macro/AI sentiment proxy. [25]
4) Upcoming catalysts on the calendar
The earnings-call transcript notes Broadcom planned to present at the New Street Research Virtual AI Big Ideas Conference on Monday, Dec. 15, 2025—a potential venue for additional commentary that markets may parse closely after Friday’s volatility. [26]
5) Dividend dates for investors who track income events
Broadcom’s newly increased dividend has a defined record date and payment date:
- Record date: Dec. 22, 2025
- Payable date: Dec. 31, 2025 [27]
6) Expect elevated volatility and “gap” behavior
A one-day move of ~11% following earnings can change how the stock trades for days or weeks:
- options pricing often stays elevated,
- support/resistance tends to form around the post-earnings lows/highs,
- and headlines can cause outsized moves as traders re-price the AI margin story.
Bottom line
Broadcom’s after-hours action on 12/12/2025 was relatively stable following a steep regular-session decline—but the narrative shifted. The market is no longer rewarding “AI growth at any price.” It is asking whether Broadcom’s AI acceleration—while undeniably real—will come with a structurally lower gross-margin profile and less predictable quarterly optics. [28]
If Monday brings additional color from Broadcom (or improved AI-sector sentiment), AVGO could rebound from a deeply emotional reaction day. If the market remains focused on profitability and efficiency, investors should expect the conversation to stay centered on margins, mix, and backlog conversion, not just revenue beats.
References
1. www.marketbeat.com, 2. www.marketbeat.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.axios.com, 6. www.reuters.com, 7. www.marketbeat.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.prnewswire.com, 11. www.prnewswire.com, 12. www.prnewswire.com, 13. www.marketbeat.com, 14. www.marketbeat.com, 15. www.reuters.com, 16. www.marketbeat.com, 17. www.reuters.com, 18. www.axios.com, 19. www.ft.com, 20. stockanalysis.com, 21. stockanalysis.com, 22. www.investopedia.com, 23. www.marketbeat.com, 24. www.reuters.com, 25. www.axios.com, 26. www.marketbeat.com, 27. www.prnewswire.com, 28. www.reuters.com
