U.S. stocks reopen for a normal session on Friday, Dec. 26, 2025, after the Christmas Day market closure and the early close on Wednesday, Dec. 24. [1]
For investors tracking Broadcom Inc. (NASDAQ: AVGO), the “day-after-holiday” setup matters because liquidity can be thinner and headline sensitivity can be higher—especially for mega-cap AI-linked names that have been moving on guidance, margins, and customer concentration.
Below is what to know about Broadcom stock before the opening bell on Dec. 26, including the latest corporate headlines, what management just guided, where the core debate is (AI growth vs. margin mix), and how Wall Street’s targets are shifting.
Broadcom stock check: where AVGO stands heading into Friday’s open
Broadcom was last indicated around $350 on Dec. 24 (the most recent trading session ahead of Christmas), with the latest reported price near $350.22.
That session saw an intraday range roughly between $347 and $353, with volume a little over 11 million shares.
The bigger picture: AVGO has been trading with elevated volatility since mid-December. TradingView data shows AVGO reached a recent peak around $414.61 on Dec. 9, 2025, and the stock has since pulled back by roughly the mid-teens from that level. [2]
The main catalyst still driving AVGO: Q4 FY2025 results and Q1 FY2026 guidance
Broadcom’s most market-moving updates in recent weeks came from its fiscal Q4 2025 earnings (quarter ended Nov. 2, 2025) and the outlook for fiscal Q1 2026.
What Broadcom reported for Q4 FY2025
From the company’s earnings release materials:
- Q4 revenue:$18.015B, up 28% year over year [3]
- Adjusted EPS (non-GAAP):$1.95 [4]
- Free cash flow:$7.466B, about 41% of revenue [5]
- Segment revenue (Q4):
Just as important as the totals: Broadcom explicitly highlighted that Q4’s growth was powered by AI-linked semiconductors—management said AI semiconductor revenue increased sharply year over year. [8]
What Broadcom guided for Q1 FY2026
Broadcom guided fiscal Q1 2026 revenue to approximately $19.1B and referenced adjusted EBITDA guidance at 67% of projected revenue. [9]
In the same release cycle, Broadcom said it expects AI semiconductor revenue to reach about $8.2B in Q1, driven by custom AI accelerators and Ethernet AI switches. [10]
This guidance beat the consensus revenue estimate cited by Reuters (using LSEG-compiled data) at the time of the release. [11]
Why the stock sold off after “strong numbers”: the margin-mix debate
If you’re trying to understand AVGO’s near-term trading psychology, this is the crux:
Broadcom projected upbeat revenue, but it also warned that gross margins would step down as AI becomes a larger mix of revenue. Reuters reported the CFO said gross margin could decline by about 100 basis points sequentially, primarily due to a higher mix of AI revenue. [12]
That margin messaging has mattered because:
- Broadcom’s custom AI processors (ASICs) can be strategically important, but the economics can differ from software-heavy revenue streams.
- Investors have become more sensitive to “AI growth at any cost,” particularly after a long rally in major AI beneficiaries. Reuters described the broader context as rising scrutiny of AI spending and valuations. [13]
- Reuters also noted concerns tied to system sales and customer concentration, citing commentary that a meaningful portion of backlog is tied to a limited number of customers. [14]
On the day after results, Reuters reported AVGO shares fell sharply as the market digested the idea that rising AI contribution could pressure reported gross margin—even while revenue momentum remains strong. [15]
Investopedia similarly framed the selloff as a reaction to profitability concerns, even as AI revenue expectations increased. [16]
How to think about it into Dec. 26: with no fresh earnings drop expected overnight, AVGO’s trading can still swing on any new “AI demand” datapoint (positive) or “AI profitability/capex payback” narrative (negative), especially in a thinner holiday tape.
The AI pipeline: backlog size and customer concentration are in focus
Reuters reported Broadcom discussed an order backlog of $73B expected to be shipped over the next 18 months. [17]
The same Reuters coverage pointed out the backlog was still concentrated among about five customers, which becomes a key “risk lens” for the stock: if a small handful of hyperscalers slow custom silicon or networking orders, sentiment can change quickly. [18]
Broadcom’s AI positioning is also intertwined with the industry’s competitive structure: Broadcom works with hyperscalers to design chips as an alternative to Nvidia GPUs, Reuters noted, referencing relationships with firms such as Google and Meta. [19]
VMware and infrastructure software: growth engine, but also headline risk
Broadcom’s infrastructure software segment (which includes VMware) is not a side story—it’s a major contributor.
From the Q4 release:
- Infrastructure software revenue:$6.943B in Q4, up 19% year over year [20]
- Full-year infrastructure software revenue (FY2025): $27.029B [21]
But VMware also remains a source of ongoing legal and regulatory headlines:
- EU legal challenge: Reuters reported that CISPE (a European cloud industry group) has challenged the European Commission’s 2023 clearance of Broadcom’s VMware deal, alleging errors in how competition impacts were assessed. Broadcom said it disagreed with CISPE’s allegations, according to Reuters. [22]
- Customer litigation: Reuters also reported that a Fidelity Investments subsidiary sued Broadcom over access to VMware software, arguing a cutoff could risk “massive outages” and disruptions. Broadcom agreed in a court filing to extend access through Jan. 21 to allow a judge time to hear the case, Reuters said. [23]
Why this matters for AVGO into Dec. 26: even if these disputes don’t change next quarter’s numbers, they can influence investor confidence around VMware renewal dynamics, pricing strategy sustainability, and reputational risk—especially if additional large enterprise customers surface with similar complaints.
Dividends and buybacks: shareholder returns remain a support pillar
Broadcom also delivered shareholder-return updates that are directly relevant to the stock setup into year-end:
Dividend
Broadcom declared a quarterly cash dividend of $0.65 per share.
- SEC filing summary: the dividend is payable Dec. 31, 2025 to shareholders of record Dec. 22, 2025. [24]
- The company also described this as a 10% increase in the quarterly dividend compared with the prior quarter. [25]
Share repurchase authorization
In its FY2025 Form 10‑K, Broadcom disclosed:
- A $10B repurchase program that had been set to run through Dec. 31, 2025 was extended to Dec. 31, 2026 after fiscal year-end. [26]
- As of Nov. 2, 2025, about $7.55B remained available for repurchases. [27]
Why it matters now: going into the last week of December, buyback capacity and dividend policy can serve as an “anchor” for long-only investors, even if near-term price action remains headline-driven.
Insider activity: what the latest Form 4 filings show
Two recent insider-related datapoints have been circulating in markets coverage:
- CEO sale filing: An SEC Form 4 filing shows a transaction dated 12/18/2025 reporting the sale of 130,000 shares at $326.02, with the filing reflecting holdings afterward (as reported in the filing). [28]
- Executive stock activity: Separate Form 4 materials reflect other executive activity (including shares surrendered/sold to cover withholding taxes tied to RSU vesting, depending on the filing’s footnotes and transaction codes). [29]
Insider sales can be scheduled, tax-related, or diversification-driven, so markets typically weigh them most heavily when they cluster, coincide with deteriorating fundamentals, or conflict with management’s narrative. Into Dec. 26, they’re best viewed as a sentiment input, not a standalone thesis.
Analyst forecasts and price targets: where expectations sit right now
Broadcom is one of the most widely covered large-cap semiconductor/software hybrids, and analyst targets have been moving with the AI narrative.
A Nasdaq.com article citing Fintel reported the average one-year price target for Broadcom was revised to about $465.27 (published Dec. 21, 2025). [30]
Other recent analyst commentary highlighted in widely read financial coverage includes:
- HSBC reiterating a Buy stance with a higher target in the $500+ range, according to an Investing.com analysis piece discussing the ASIC opportunity. [31]
- Barron’s reported Jefferies shifted its top semiconductor pick to Broadcom and raised its price target (with the note emphasizing Broadcom’s custom chip upside). [32]
Meanwhile, the core modeling debate remains consistent across coverage: bulls tend to focus on the durability of custom AI silicon/networking demand plus software cash flows, while bears focus on margin mix, customer concentration, and whether hyperscalers eventually rebalance AI capex.
What to watch before the market opens Friday, Dec. 26, 2025
If you’re tracking AVGO into the open, here’s a practical checklist of the specific catalysts that can matter most in a post-holiday session:
- AI-semis sentiment at the index level
Broadcom has been treated as an “AI bellwether” in recent market commentary, meaning it can move with the group even without company-specific news. [33] - Any fresh headlines tied to VMware pricing, renewals, or litigation
The Fidelity case and EU legal challenge show VMware-related issues can still generate market-moving headlines. [34] - Reactions to the margin narrative
The most repeatable near-term swing factor has been the idea that more AI revenue can mean lower reported gross margin—despite strong demand. [35] - Holiday-market microstructure
With the market reopening after Christmas, trading conditions can be unusual (lighter participation and more sensitivity to large orders), which can amplify moves—especially in mega-caps. [36] - “Year-end positioning” in mega-cap tech
AVGO’s size and liquidity make it a frequent vehicle for both risk-on momentum and risk-off trimming into year-end. If broader indices gap, AVGO can follow.
Bottom line for Broadcom (AVGO) into Dec. 26
Broadcom heads into the Dec. 26 session with a clear fundamental message: AI-driven semiconductor demand is accelerating, infrastructure software remains large and cash-generative, and management has reinforced capital returns via a higher dividend and ongoing buyback authorization. [37]
But the market’s near-term “scorecard” for AVGO is less about whether AI demand exists, and more about how profitable that AI mix will be, how concentrated the customer base becomes, and whether VMware-related disputes create reputational or renewal headwinds. [38]
For Friday’s open, the most realistic setup is that AVGO trades as a hybrid of (1) an AI semiconductor proxy and (2) a software cash-flow story—with headlines and holiday liquidity determining which side dominates the tape.
This article is for informational purposes only and does not constitute investment advice.
References
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