Broadcom Inc. (NASDAQ: AVGO) heads into the Monday, Dec. 22, 2025 U.S. market session at the center of the AI trade again—this time for a different reason than most of 2025. After a powerful run earlier in the year, Broadcom shares have been hit by a sharp post-earnings reset tied to profitability concerns, AI customer concentration questions, and renewed scrutiny of the cost of building out the next wave of AI infrastructure.
At the latest available close, Broadcom stock was around $340.
Below is what investors and traders should know before the opening bell—covering the latest headlines, company guidance, analyst forecasts, and the near-term catalysts that could move AVGO.
Where Broadcom stock stands going into Dec. 22
Broadcom’s recent drawdown has been severe by mega-cap standards, coming right after fiscal Q4 results. Several market narratives have converged:
- “Beat-and-raise” wasn’t enough: Broadcom posted strong revenue growth and issued an upbeat next-quarter revenue outlook, but the market’s focus shifted to margin pressure.
- AI revenue is surging, but mix matters: Management signaled that AI-driven growth can come with lower gross margins than some investors had modeled.
- The “who is the customer?” debate returned: A lack of specific disclosure about a major incremental AI customer—and uncertainty about the timing of large OpenAI-linked revenue—has been a sticking point in parts of the market. [1]
The most important update: Broadcom’s fiscal Q4 results and Q1 guidance
Broadcom’s latest earnings release is the foundation for nearly every forecast and “what happens next” debate around the stock.
Q4 fiscal 2025 highlights (reported Dec. 11, 2025)
Broadcom reported:
- Revenue:$18.015 billion, up 28% year over year
- GAAP net income:$8.518 billion
- Non-GAAP net income:$9.714 billion
- Adjusted EBITDA:$12.218 billion (about 68% of revenue)
- GAAP diluted EPS:$1.74
- Non-GAAP diluted EPS:$1.95
- Free cash flow:$7.466 billion (about 41% of revenue) [2]
Broadcom also broke out growth by segment:
- Semiconductor solutions revenue:$11.072 billion (up 35% YoY)
- Infrastructure software revenue:$6.943 billion (up 19% YoY) [3]
What Broadcom guided for next
For Q1 fiscal 2026, Broadcom guided to:
- Revenue: approximately $19.1 billion (about 28% growth YoY)
- Adjusted EBITDA: approximately 67% of projected revenue [4]
And importantly for the AI narrative, CEO Hock Tan said Broadcom expects AI semiconductor revenue to double year over year to $8.2 billion in Q1, driven by custom AI accelerators and Ethernet AI switches. [5]
Why the stock sold off after strong numbers: margins, not revenue
Reuters captured the market’s core concern: profitability headwinds tied to AI mix.
Broadcom projected Q1 revenue above consensus, but management also warned that gross margin is expected to fall about 100 basis points sequentially, primarily because AI revenue makes up a larger share of the mix. [6]
That message landed at a time when investors across AI hardware have become more sensitive to:
- the cost of supplying (or building) full AI systems,
- the pricing power of key foundry and packaging partners,
- and whether AI capex is producing enough ROI quickly enough to justify premium valuations.
Broadcom is often treated as an “AI bellwether” because it touches multiple layers of the stack: networking silicon, custom accelerators (ASICs), optical/connection technologies, and data-center software via VMware. So when Broadcom signals margin pressure from AI mix, it can ripple beyond AVGO into the broader AI complex. [7]
The biggest bull argument: visibility and scale in custom AI (ASICs) and networking
Even after the volatility, many analysts remain constructive on Broadcom’s position in custom AI compute and AI networking—especially as hyperscalers try to diversify away from a single accelerator platform and optimize costs with custom silicon.
Two data points often cited:
- Broadcom’s AI demand signals are large and multi-year.
- Ethernet networking is increasingly a strategic battleground, with Broadcom positioned as a major supplier for AI cluster connectivity.
Reuters reported that Broadcom discussed a $73 billion order backlog expected to ship over the next 18 months, largely across five customers—a figure that underscores both scale and concentration. [8]
The biggest bear argument: customer concentration and “show-me” timing on AI profits
The flip side of the backlog story is that AI demand, at this scale, can be lumpy and concentrated. If a handful of customers represent a large share of incremental AI revenue, the stock can become more sensitive to:
- customer capex pauses or timing shifts,
- procurement negotiation pressure,
- and changes in platform strategy (build vs. buy, or shifting workloads).
This dynamic is part of why investors have focused so heavily on Broadcom’s comments around incremental AI customers and the timing of OpenAI-related revenue contributions. [9]
Analyst forecasts and price targets: still bullish, but with a new debate
Despite the pullback, several prominent analyst notes and media summaries show that Wall Street’s long-term stance on Broadcom remains broadly constructive—particularly because AVGO sits at the intersection of AI compute (custom chips) and AI networking.
Jefferies and Bank of America: “AI still the place to be,” Broadcom a top pick
Investopedia reported that both Bank of America and Jefferies stayed bullish heading into 2026, with Jefferies highlighting Broadcom as a top AI pick and citing a Street-high $600 price target (implying substantial upside from around $340). [10]
Jefferies also pointed to an additional potential tailwind: Google’s moves around custom chips creating a “greenfield opportunity” for Broadcom as custom silicon expands beyond internal use cases. [11]
J.P. Morgan: top chip pick for 2026 (per Barron’s summary)
A Barron’s summary said J.P. Morgan reiterated an Overweight stance and a $475 price target, with a thesis centered on Broadcom’s role in custom AI chips and networking. [12]
Jefferies’ Blayne Curtis: Broadcom among “best chip stocks” for 2026 (Barron’s summary)
Another Barron’s summary highlighted a $500 target from Jefferies’ Blayne Curtis and framed Broadcom as a favored way to play ASIC growth and hyperscaler capex into 2026. [13]
What this means for Monday’s trade: the market is not debating whether AI demand exists; it’s debating how profitable that demand will be in the near term—and what multiple the stock deserves while margins are under pressure.
Dividend news: ex-dividend timing is a near-term technical factor
Broadcom increased its quarterly dividend and confirmed the next payment details:
- Quarterly dividend:$0.65 per share (a 10% increase from the prior quarter)
- Payable:Dec. 31, 2025
- Shareholders of record: as of the close of business Dec. 22, 2025 [14]
Many market calendars list Dec. 22, 2025 as the ex-dividend date for AVGO. [15]
Why it matters before the open: On an ex-dividend date, a stock often opens mechanically lower by roughly the dividend amount (all else equal). For AVGO, $0.65 is small relative to a ~$340 share price, but it can still matter for very short-term trading, options positioning, and headline-driven premarket narratives.
VMware: legal and regulatory headlines remain a live risk
Broadcom’s infrastructure software business—powered largely by VMware—has been a major driver of cash flow and a key pillar of the “AI + software” investment case. But VMware-related pricing and customer lock-in debates continue to generate headlines.
Reuters reported that CISPE (a European cloud industry group) has challenged the European Commission’s prior clearance of Broadcom’s VMware deal, arguing regulators failed to properly assess competitive impacts in server virtualization software. Broadcom has disagreed with CISPE’s allegations. [16]
What to watch: These developments can introduce headline risk, particularly in Europe, and can keep pressure on the narrative around VMware monetization—even if the near-term financial impact is hard to quantify day-to-day.
Market context: holiday-shortened week could amplify moves
This week is structurally different for liquidity and volatility:
- The NYSE will close early (1:00 p.m. ET) on Wednesday, Dec. 24, 2025, and markets are closed Thursday for Christmas. [17]
- Reuters also reported that major U.S. exchanges confirmed trading schedules remain in place for Dec. 24 and Dec. 26. [18]
In thinner holiday liquidity, stocks that are already “in motion” (like AVGO after a sharp repricing) can sometimes experience bigger intraday swings on less volume.
What to watch before the bell on Dec. 22: a practical checklist for AVGO
Here are the most actionable, market-moving items to monitor ahead of the open:
- Any follow-through from the margin narrative
The key issue is whether investors continue to treat Broadcom’s AI mix as a margin headwind—or shift back to viewing it as a multi-year growth engine. - Dividend/ex-dividend dynamics
If AVGO is widely trading ex-dividend on Dec. 22, don’t overread a modest drop at the open without adjusting for the dividend effect. - AI peer sympathy moves
Broadcom often trades in sympathy with mega-cap AI names and data-center infrastructure suppliers. If the broader AI cohort is risk-on or risk-off early Monday, AVGO can move with it. - VMware-related headlines
Any incremental news on European scrutiny, customer disputes, or enterprise licensing can move sentiment quickly—even if it doesn’t immediately change quarterly numbers. - Guidance credibility vs. valuation debate
Bulls will point to Q1 guidance of $19.1B revenue and $8.2B AI semiconductor revenue; bears will focus on the margin path and customer concentration. [19]
Bottom line for Monday: Broadcom’s story is intact, but the market is repricing the margins
Going into the Dec. 22 open, Broadcom stock remains a high-stakes proxy for two big 2026 questions:
- How durable is custom AI silicon demand across hyperscalers and frontier model builders?
- How much profitability will companies sacrifice to win—and deliver—AI infrastructure at massive scale?
Broadcom’s own numbers argue demand is strong (Q1 revenue outlook $19.1B, AI semiconductor revenue expected $8.2B). [20]
References
1. www.marketwatch.com, 2. www.prnewswire.com, 3. www.prnewswire.com, 4. www.prnewswire.com, 5. www.prnewswire.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.marketwatch.com, 10. www.investopedia.com, 11. www.investopedia.com, 12. www.barrons.com, 13. www.barrons.com, 14. www.prnewswire.com, 15. www.nasdaq.com, 16. www.reuters.com, 17. www.nyse.com, 18. www.reuters.com, 19. www.prnewswire.com, 20. www.prnewswire.com
