Broadcom Inc. (NASDAQ: AVGO) just wrapped one of its most closely watched sessions of 2025. On Monday, December 8, the AI and infrastructure software giant surged to a fresh record high above $407 before easing back to roughly the $400 mark, leaving the stock up close to 3% on the day even as the broader U.S. market slipped. [1]
The catalyst: reports that Microsoft is in talks with Broadcom about future custom AI chip designs — a move that could shift key business away from rival Marvell Technology and further cement Broadcom’s role at the center of the AI infrastructure boom. [2]
With the Federal Reserve’s rate decision looming on Wednesday and Broadcom’s own Q4 earnings scheduled for after the bell on Thursday, December 11, traders heading into the December 9 open have a lot to digest. Here’s a detailed look at what happened after the bell on December 8 — and what matters most before the next trading day begins.
1. How Broadcom Stock Traded on December 8, 2025
New highs, big volume, market-beating gains
- Broadcom shares climbed roughly 2.5%–3% on Monday, trading as high as about $407.29 — a new 52‑week and all‑time high — before settling near $400 into the close. [3]
- MarketBeat’s intraday data shows AVGO “traded as high as $407.29 and last traded at $400.5550,” versus a prior close of $390.24 on Friday, underscoring a solid one‑day jump on heavy activity. [4]
- Investing.com’s historical table lists December 8 with a last price around $401, a range of roughly $397.6–$407.2, and a gain of about 2.8%, with volume around 25.5 million shares, in line with the stock’s average volume. [5]
Over the past year, Broadcom has delivered a triple‑digit return: Investing.com pegs its 12‑month performance at about +124%, with a 52‑week range of $138.10–$407.29. [6] Barchart puts the 10‑year total return above 2,500%, with a market cap now around $1.84 trillion — placing Broadcom firmly among the world’s most valuable companies. [7]
That strength stands out against Monday’s macro backdrop: major U.S. indexes were down 0.3%–0.5% as investors waited for the Fed’s interest‑rate decision, with technology the only S&P 500 sector in the green. [8] In other words, AVGO wasn’t just drifting higher with the market — it was leading it.
2. The Catalyst: Microsoft May Shift Custom AI Chips to Broadcom
A rumor that hit the entire AI hardware complex
The spark came from a report in The Information suggesting that Microsoft is in talks with Broadcom to design future custom AI chips, potentially shifting a major contract away from Marvell Technology. [9]
Key points from Monday’s coverage:
- Azat TV reports that Broadcom stock rose more than 2% in pre‑market trading on December 8, while Marvell fell about 6% after the Microsoft story circulated, with no official confirmation yet from Microsoft or Broadcom. [10]
- Benzinga notes that the report raised fears Marvell could lose a pillar of its hyperscaler strategy, while Broadcom “seized momentum” as the potential new partner for Microsoft’s future custom AI chips. [11]
- Investopedia’s live markets update highlighted Marvell as one of the day’s biggest decliners (down around 7%) and Broadcom up about 2.5%, explicitly tying the move to the Microsoft–Broadcom talks. [12]
A separate Nasdaq re‑publication of a Motley Fool piece framed the situation more cautiously: Microsoft “might be” about to switch its chips business from Marvell to Broadcom — but it also might not, and J.P. Morgan’s Harlan Sur suggested Marvell’s Microsoft relationship remains intact for now. [13]
So far, neither Microsoft nor Broadcom has publicly confirmed a deal, which means Monday’s price action is still built on reports and not formal contracts. That’s important heading into Tuesday’s open: any clarification, confirmation, or denial from the companies could move AVGO sharply in pre‑market or early regular trading.
Why a Microsoft win would be such a big deal
Broadcom is already a key provider of custom AI accelerators and networking silicon to a handful of hyperscale cloud customers — not just Microsoft, but also Google, Meta, and other AI leaders. [14]
- A detailed PredictStreet analysis notes that AI semiconductor revenue hit $5.2 billion in Q3 FY2025, up 63% year‑over‑year, and is projected to reach $6.2 billion in Q4. [15]
- Barchart adds that CEO Hock Tan recently tied his 2030 compensation package to a target of over $120 billion in AI revenue, up from about $20 billion in AI revenue expected for fiscal 2025 — implying a roughly 6x increase over five years if Broadcom executes. [16]
A deeper Microsoft partnership would reinforce Broadcom’s role as a go‑to designer of custom AI chips (ASICs) and the networking “plumbing” that ties thousands of accelerators together, potentially unlocking tens of billions of additional revenue over time if the relationship scales. [17]
But it’s also a reminder that Broadcom’s fortunes are heavily tied to a small number of giant customers. PredictStreet estimates Broadcom’s AI growth is concentrated in roughly seven hyperscale clients, with only four currently active, underscoring both the opportunity and the customer‑concentration risk. [18]
3. Wall Street’s Take: Upgrades, Targets and Valuation Warnings
Fresh price‑target hikes on December 8
Monday’s news didn’t land in a vacuum. Several analysts either reiterated or boosted bullish calls on Broadcom:
- Cantor Fitzgerald raised its price target to $525 from $450 and kept an Overweight rating, citing the Microsoft custom‑chip story and strong AI demand. [19]
- HSBC lifted its price target to $535 from $400 while maintaining a Buy rating, highlighting Broadcom’s positioning in AI hardware and infrastructure. [20]
- Susquehanna recently upped its AVGO target to $450 from $400, keeping a Positive rating, with its latest note focusing on Broadcom’s deepening role in Google’s TPUv7 ecosystem and expanding ASIC/customer base heading into 2026. [21]
Barchart’s synthesis of analyst data shows 40 analysts covering AVGO, with 34 rating it a “Strong Buy,” three a “Moderate Buy,” and three a “Hold.” The average price target sits around $412, only a few percent above where the stock traded near $400 on Monday — a sign that the share price has already “caught up” to many published targets. [22]
Valuation: priced for perfection?
The question heading into Tuesday (and Thursday’s earnings) is whether Broadcom is now priced for perfection:
- PredictStreet’s fundamental review cites forward P/E ratios between roughly 41x and 46x, versus a trailing P/E near 100x, with a PEG ratio around 1.1–1.5 — rich even by large‑cap tech standards. [23]
- The same analysis references a Morningstar fair‑value estimate of $365 per share, implying the stock could be trading roughly 28% above intrinsic value by their discounted cash‑flow model. [24]
- Barchart notes that if Broadcom hits consensus projections — growing revenue from about $63.4 billion in fiscal 2025 to $177 billion by 2029 and free cash flow from $29.5 billion to $94 billion — the stock could still see around 53% upside over three years if it eventually trades at 30x forward free cash flow instead of today’s ~47x multiple. [25]
In short: the growth story is massive, and most of Wall Street is bullish, but expectations are now very high. Even slightly “good but not great” news can trigger volatility when a stock is this widely loved and this richly valued.
4. Earnings Countdown: Broadcom’s Q4 2025 Report Is the Next Big Catalyst
While Monday’s move was dominated by the Microsoft chatter, the official, scheduled catalyst for AVGO this week is earnings.
- Broadcom will report Q4 and full‑year fiscal 2025 results after the market close on Thursday, December 11, 2025, according to the company’s investor relations calendar and multiple earnings previews. [26]
- Benzinga’s pre‑earnings recap notes that Wall Street expects Q4 revenue of about $17.5 billion (roughly 24% year‑over‑year growth) and adjusted EPS near $1.86–$1.87, up around 32% from a year ago. [27]
- PredictStreet confirms Broadcom’s own Q4 guidance centers on $17.4 billion in revenue and an adjusted EBITDA margin around 67%, implying very high profitability even at this scale. [28]
Recent performance has been strong:
- Q3 FY2025 (ended August 3, 2025) delivered record revenue of $15.95 billion, up 22% year‑over‑year, and non‑GAAP EPS of $1.69, beating consensus. [29]
- AI semiconductor revenue in that quarter was $5.2 billion, up 63% year‑over‑year, and management guided to $6.2 billion in AI revenue for Q4. [30]
- Free cash flow in Q3 hit a record $7.02 billion, or 44% of revenue, up 47% versus the prior year. [31]
Finviz’s earnings preview warns that Broadcom has never traded at such a high multiple heading into an earnings release, suggesting the market may be demanding more than a simple “meet or slight beat” this time. [32]
That sets up a key narrative heading into Tuesday and the rest of the week: can Broadcom deliver enough upside and guidance to justify a near‑$2 trillion valuation and record share price — on top of the Microsoft buzz?
5. The Bigger Story: From Chips to AI “Plumbing” and VMware Software
Two engines: semiconductors and infrastructure software
Broadcom is no longer “just” a chip company.
PredictStreet’s deep‑dive breaks the business into two roughly balanced segments as of late 2024 and 2025: [33]
- Semiconductor Solutions (about 58% of revenue in FY2024):
Custom AI accelerators (XPUs), ultra‑fast Ethernet switches (Tomahawk 6, Tomahawk Ultra, Jericho4), broadband, wireless components, storage and industrial chips. [34] - Infrastructure Software (about 42% of revenue):
Largely driven by the VMware acquisition, now focused on VMware Cloud Foundation and other enterprise software from CA Technologies and Symantec, with a shift from perpetual licenses to subscription‑based models. [35]
The VMware deal nearly tripled infrastructure software revenue to about $21.5 billion in FY2024, giving Broadcom a second, more recurring revenue engine to balance the cyclical chip business and support consistent free cash flow and dividends. [36]
AI “plumbing”: why some see Broadcom as a new member of the Mag-7
A widely shared Tastylive piece makes the case that Broadcom should be considered part of a “new Magnificent Seven” of AI infrastructure leaders: [37]
- Broadcom has quietly climbed into the world’s top-10 most valuable companies, currently around No. 6 by market cap, ahead of Meta and Tesla, with a P/E roughly half Tesla’s. [38]
- It provides the “plumbing” of AI:
- Tomahawk 6: a 102.4 Tbps Ethernet switch for 800G fabrics.
- Jericho3‑AI and Jericho4 fabrics: capable of networking up to 32,000 accelerators, positioning Ethernet as a credible alternative to Nvidia’s InfiniBand in large AI clusters.
- 800G “Thor Ultra” NICs and other custom‑silicon solutions built directly alongside top hyperscalers. [39]
As Tastylive puts it, Broadcom’s logo rarely appears on the front of AI servers, but its chips and networking tech are behind the majority of today’s big AI buildouts — making it a foundational beneficiary of rising AI capex, even if it doesn’t get Nvidia‑style headlines. [40]
6. Risks on the Radar: What Could Go Wrong From Here
Even after Monday’s pop, most commentary around Broadcom remains positive — but more and more analysts are layering in caution alongside the bull case.
1. Valuation and “expectations risk”
- Morningstar‑style fair‑value work summarized by PredictStreet suggests AVGO might be around 28% above intrinsic value, using a $365/share fair‑value estimate versus a roughly $400 market price. [41]
- Some recent research highlighted by MarketBeat explicitly warns that Broadcom shares “could be meaningfully above their intrinsic value,” reinforcing the idea that upside may be more limited for new buyers at these levels. [42]
With forward P/E multiples in the mid‑40s and free‑cash‑flow multiples in the high‑40s, even a small disappointment in AI growth, margins or guidance could trigger a noticeable pullback.
2. Customer and segment concentration
PredictStreet notes that a narrow group of seven hyperscale customers accounts for the bulk of Broadcom’s AI revenue, with only four currently active — meaning losing or underperforming with even one major client (e.g., Microsoft, Google, Meta, or a big AI lab) could materially affect growth trajectories. [43]
The Microsoft rumor illustrates both sides of that coin: a win could be huge, but hyperscaler capex priorities can shift fast.
3. Leverage and regulatory scrutiny
- Broadcom carries over $64 billion in total debt, with net debt around $53.5 billion, though massive free cash flow (and high margins) currently keeps that leverage manageable. [44]
- The VMware acquisition continues to attract regulatory and customer scrutiny around licensing and pricing changes, and PredictStreet flags regulatory risk as one of the key long‑term overhangs for the stock. [45]
4. Macro and Fed sensitivity
This week’s Federal Reserve meeting is another wild card. Investopedia’s “Week Ahead” preview notes that the Fed is widely expected to deliver a third consecutive rate cut on Wednesday, taking rates into the 3.5%–3.75% range — but with important uncertainty around 2026 guidance. [46]
High‑multiple, AI‑heavy names like Broadcom have benefited from the declining‑rates narrative; a more hawkish‑than‑expected tone from Chair Jerome Powell could pressure these valuations, even if company fundamentals remain intact. [47]
7. Seven Things to Watch Before the Market Opens on December 9, 2025
For traders and investors tracking AVGO into Tuesday morning, here are the key checkpoints to monitor:
- Pre‑market price action around the $400 level
After Monday’s run to record highs, watch whether Broadcom holds near $400, extends higher, or sees profit‑taking. A modest pullback after a big move would be normal, but aggressive selling could signal that short‑term traders are de‑risking ahead of the Fed and earnings. - Any official commentary from Microsoft, Broadcom or Marvell
The rumor mill is in charge for now. A press release, blog post, or earnings‑related comment from any of the three companies confirming, downplaying, or denying the custom‑chip talks could quickly reprice all three stocks in pre‑market trading. [48] - Fresh analyst notes, upgrades or downgrades
Monday brought big target hikes from Cantor, HSBC, and ongoing optimism from Susquehanna. Any Tuesday‑morning research that questions valuation, trims targets, or turns more cautious could weigh on AVGO; conversely, more bullish initiations could reinforce the momentum. [49] - Index futures and bond yields before the bell
Keep an eye on Nasdaq futures and the U.S. 10‑year Treasury yield. Monday saw broad indexes down while tech stayed green; a deeper macro risk‑off move or a sharp move higher in yields could make investors less forgiving of richly valued AI names, Broadcom included. [50] - Semiconductor sector tone
Monday’s move was not just about AVGO — it reshuffled expectations across the AI hardware space, especially for Marvell. Watch ETFs and peers (NVDA, MRVL, AMD, etc.) for signs of sector‑wide follow‑through or reversal that could amplify or dampen Broadcom’s individual move. [51] - Shifts in AI and cloud‑capex headlines
Barchart and Tastylive both emphasize Broadcom’s reliance on ongoing, aggressive AI infrastructure spending from a handful of hyperscalers and AI labs. Any new reporting about Google’s TPU roadmap, Anthropic or OpenAI rack build‑outs, or cloud providers tightening capex could change sentiment quickly. [52] - Options market and implied volatility into Thursday’s earnings
While specific numbers vary by platform, options flow and implied volatility are already elevated heading into Thursday’s Q4 print. As Tuesday’s session approaches, watch whether option premiums expand further, signaling expectations for a big move — or compress, suggesting traders think a lot of the news is already priced in. [53]
8. What Monday’s Move Means for Different Types of Investors
- Short‑term traders
For active traders, Monday’s high near $407 and prior close around $390 mark obvious reference levels. Many will be watching whether AVGO can build a base above $395–$400 into Thursday’s earnings, or if it shows signs of a “buy the rumor, sell the news” setup after the Microsoft headlines. [54] - Long‑term investors
Longer‑term investors face a more nuanced trade‑off:- On one side: explosive AI revenue growth, powerful free cash flow, dual engines in chips and subscription software, and mounting evidence that Broadcom has become core infrastructure for the AI era. [55]
- On the other: premium valuation, concentration in a handful of hyperscale customers, significant leverage, and macro uncertainty around rates and regulation, particularly related to VMware. [56]
As always, how attractive AVGO looks depends on your time horizon, risk tolerance, and broader portfolio. The same attributes that fuel massive upside in AI cycles can also lead to heightened volatility if sentiment or macro conditions shift.
Important: This article is for informational and news‑analysis purposes only and does not constitute financial advice, investment recommendation, or a solicitation to buy or sell any security. Always do your own research and consider consulting a qualified financial adviser before making investment decisions.
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