Broadcom Inc. (NASDAQ: AVGO) stock is ending the week in a familiar modern-market paradox: the company just posted blockbuster growth driven by AI infrastructure demand—yet the shares have been whipsawed by worries that the fastest-growing part of the business could pressure near-term margins.
As of Friday, December 19, 2025, Broadcom shares are trading around $330. That puts the stock well off its early-December peak, even as Wall Street continues to publish bullish price targets and as broader AI sentiment shows signs of stabilizing following upbeat signals from other chipmakers. [1]
Broadcom stock price action: what’s happening on Dec. 19
Broadcom’s latest quoted price is $329.88 on Dec. 19. The most recent full session close (Thursday, Dec. 18) was also $329.88, following a rebound day for several large-cap semiconductor names. [2]
The bigger story is the drawdown from the recent high: multiple market commentary outlets note AVGO has fallen roughly ~20% from its December peak, bringing “valuation vs. fundamentals” back to center stage for investors who had treated Broadcom as a near-straight-line AI winner for much of 2025. [3]
Why Broadcom sold off after strong earnings: the margin math spooked investors
Broadcom’s fiscal Q4 2025 results (quarter ended Nov. 2, 2025) were objectively strong:
- Q4 revenue:$18.015B, up 28% year over year
- Non-GAAP EPS:$1.95
- FY2025 revenue:$63.887B, up 24% year over year
- Q1 FY2026 revenue guidance: about $19.1B (about +28% year over year)
- AI semiconductor revenue: management said Q4 AI semiconductor revenue rose 74% year over year, and guided Q1 AI semiconductor revenue to $8.2B (expected to double year over year)
- Dividend: raised 10% to $0.65/share quarterly (target $2.60/share annually) [4]
So why did the stock drop hard anyway?
A major theme in coverage this week is that Broadcom’s AI boom is coming with mix-driven margin pressure—especially as investors focus on the economics of system-level AI deals and custom silicon ramps. Reuters and other outlets highlighted investor unease around profitability as the AI portion of the business grows. [5] Barron’s similarly framed the post-earnings slump around concerns that AI products can carry lower gross margins than other parts of Broadcom’s portfolio. [6]
The bull case investors keep circling back to: $73B AI backlog and “duration”
Even critics of the selloff concede Broadcom isn’t short on demand signals.
After earnings, Broadcom discussed an AI order backlog of $73 billion expected to ship over the next 18 months, a figure repeatedly referenced across financial media as a core pillar of the long-term growth narrative. [7]
That backlog matters because Broadcom sits in multiple “picks-and-shovels” layers of AI infrastructure:
- Custom AI accelerators / ASICs (application-specific integrated circuits)
- High-speed networking, including Ethernet switching used to connect accelerators at scale (Broadcom explicitly pointed to Ethernet AI switches as a driver of the Q1 AI ramp) [8]
And it’s not only semiconductors. Broadcom’s Infrastructure Software segment—boosted by VMware—remains huge and cash-generative, which is part of why the company felt comfortable raising the dividend again. [9]
What’s new on Dec. 19: Truist lifts its AVGO price target again
The headline analyst action dated Dec. 19, 2025: Truist raised its price target on Broadcom to $510 from $500 and reiterated a Buy rating, according to a note circulated by The Fly. [10]
Notably, Truist also flags a theme that keeps coming up in 2025’s AI trade: the constraint is no longer only chips—it’s power availability and financing for AI infrastructure buildouts. Even so, Truist argues AI infrastructure semiconductor stocks still look “cheap” relative to growth when looking out to later-year estimates. [11]
The broader “AI bubble” mood is easing—at least for now
Broadcom has become a symbol stock for the AI trade’s new phase: investors still believe in multi-year demand, but they’re no longer rewarding any AI exposure at any price.
On Dec. 19, Reuters reported U.S. stock index futures edging higher as tech rebounded, with Micron’s strong forecast helping revive confidence around AI-linked names after a rocky stretch. [12] MarketWatch also pointed to seasonal dynamics—profit-taking and rebalancing—arguing that a December wobble in momentum darlings doesn’t automatically mean the AI thesis is broken. [13]
For Broadcom shareholders, that context matters because AVGO’s recent drop was widely discussed as part of a broader “AI expectations reset,” not as a Broadcom-only problem. [14]
AVGO forecasts: where Wall Street price targets stand on Dec. 19
Despite the volatility, mainstream consensus dashboards remain constructive:
- MarketBeat lists an average 12‑month Broadcom price target around $435.96, implying roughly 32% upside from ~$330. [15]
- Truist’s fresh $510 target is now one of the highest prominently circulated targets in today’s coverage. [16]
Other notable recent target moves (earlier this week) help explain why “buy the dip” narratives haven’t disappeared:
- UBS raised its target to $475 and reiterated Buy (Dec. 15). [17]
- Citi raised its target to $480 and reiterated Buy (Dec. 12). [18]
- Barron’s reported J.P. Morgan maintained an Overweight rating and a $475 target, keeping Broadcom as a top chip pick for 2026 even after the sharp slide. [19]
The common thread across these notes: analysts are generally treating the post-earnings margin anxiety as a near-term optics problem set against what they see as a multi-year AI networking + custom silicon opportunity.
Dividend update: Broadcom raises payout again
Broadcom’s dividend move is one of the cleaner “hard facts” in a week dominated by sentiment shifts:
- Quarterly dividend increased 10% to $0.65/share
- Payable Dec. 31, 2025 to shareholders of record Dec. 22, 2025
- Management described a target FY2026 annual dividend of $2.60/share, marking the 15th consecutive annual dividend increase since the dividend began in fiscal 2011 [20]
Market trackers broadly reflect the updated dividend run-rate and calendar (including the next ex-dividend timing). [21]
VMware: steady growth engine—and a political/regulatory overhang in Europe
Broadcom’s VMware acquisition continues to cut both ways in the market narrative.
On the “plus” side, Infrastructure Software is now a massive contributor, with Broadcom reporting FY2025 Infrastructure Software revenue of $27.029B (up 26% year over year). [22]
On the “messy” side, VMware licensing and bundling changes remain controversial—particularly among cloud service providers and enterprise customers. This month, European cloud industry group CISPE has challenged the European Commission’s approval of Broadcom’s VMware deal, arguing the merger enabled price hikes and customer lock-in. [23]
Meanwhile, hyperscaler-related licensing shifts have also been rolling through the ecosystem. For example, Google Cloud has published guidance on VMware Cloud Foundation licensing changes impacting Google Cloud VMware Engine customers, tied to the newer “bring your own” subscription model. [24]
For AVGO stock, the practical investor question is whether VMware’s monetization strategy and partner restructuring ultimately expand long-term cash flows—or whether backlash and legal friction create churn, reputational drag, or regulatory risk.
What to watch next for Broadcom (AVGO) stock
Going into year-end and early 2026, investors are likely to keep returning to a few high-impact variables:
Broadcom-specific catalysts:
- Whether management’s guided $8.2B Q1 AI semiconductor number prints cleanly—and whether profitability concerns ease as the mix evolves [25]
- Evidence that the $73B AI backlog converts to revenue on schedule [26]
- Any additional clarity around customer concentration and the pace of next-gen AI cluster buildouts (a key sensitivity in recent commentary) [27]
Macro catalysts (because AVGO now trades like a macro-AI proxy):
- Signs that AI infrastructure spending is accelerating—or hitting power/funding constraints (explicitly raised again in today’s Truist note) [28]
- Market-wide positioning shifts around year-end rebalancing and “risk-on/risk-off” moves in mega-cap tech [29]
Broadcom’s story hasn’t become simple—if anything, it’s become more interesting. The company is proving it can grow at AI-era scale while throwing off enormous cash. [30] But the market is also reminding investors that when expectations get too perfect, even great results can trigger a selloff.
References
1. finance.yahoo.com, 2. www.marketwatch.com, 3. finance.yahoo.com, 4. www.prnewswire.com, 5. www.reuters.com, 6. www.barrons.com, 7. www.reuters.com, 8. www.prnewswire.com, 9. www.prnewswire.com, 10. www.tipranks.com, 11. www.tipranks.com, 12. www.reuters.com, 13. www.marketwatch.com, 14. www.reuters.com, 15. www.marketbeat.com, 16. www.tipranks.com, 17. www.tipranks.com, 18. www.tipranks.com, 19. www.barrons.com, 20. www.prnewswire.com, 21. stockanalysis.com, 22. www.prnewswire.com, 23. www.itpro.com, 24. cloud.google.com, 25. www.prnewswire.com, 26. www.reuters.com, 27. www.marketwatch.com, 28. www.tipranks.com, 29. www.marketwatch.com, 30. www.prnewswire.com
