Broadcom Inc. (NASDAQ: AVGO) is starting the week in a very different mood than it ended the last one. After a sharp post-earnings selloff that helped rattle the broader “AI trade,” investors are trying to decide whether Broadcom’s pullback is a warning sign about profitability in custom AI silicon—or a reset that creates a more attractive entry point into one of the market’s biggest AI infrastructure winners. [1]
As of Monday, Dec. 15, Broadcom shares were trading around $354 in U.S. session pricing (midday), after opening near $356. That places the stock near the center of a debate that has defined the final stretch of 2025 for mega-cap AI names: revenue momentum is undeniable, but margins and visibility matter more than ever. [2]
Below is the full roundup of today’s news, forecasts, and analysis shaping Broadcom stock on 15.12.2025, including what Wall Street thinks happens next—and which numbers investors are watching most closely.
What’s driving Broadcom stock on Dec. 15: a fragile rebound after the AI selloff
Broadcom entered Monday as one of the key names cited in the “AI shakeout” narrative. Reuters’ market commentary noted that last week’s declines in AI bellwethers—particularly Broadcom and Oracle—helped drag on the Nasdaq even while other parts of the market held up better, a sign that investors are rotating and becoming more selective. [3]
The Associated Press similarly described a modest Monday lift in U.S. indexes, with AI-linked stocks rebounding after last week’s declines ahead of a busy macro week that includes a delayed jobs report and inflation data. [4]
That backdrop matters for AVGO because the stock’s latest move wasn’t just about “earnings beats.” It was about expectations—and whether Broadcom’s AI growth is becoming less profitable as it scales. [5]
Broadcom earnings recap: record revenue, strong cash flow, and a bullish Q1 forecast
Broadcom’s fiscal Q4 report (for the quarter ending Nov. 2, 2025) delivered headline numbers that most companies would envy:
- Revenue:$18.015 billion, up 28% year over year
- GAAP net income:$8.518 billion
- Adjusted EBITDA:$12.218 billion, 68% of revenue
- Non-GAAP diluted EPS:$1.95
- Free cash flow:$7.466 billion, 41% of revenue
- Dividend: raised 10% to $0.65 per share [6]
For the current quarter (fiscal Q1 2026), Broadcom guided to:
- Revenue: approximately $19.1 billion (about +28% year over year)
- Adjusted EBITDA: about 67% of revenue
- AI semiconductor revenue: expected to double year over year to $8.2 billion, driven by custom accelerators and Ethernet AI switches [7]
In other words: the demand picture looked strong, and the near-term top-line forecast came in ahead of what many analysts were modeling. Reuters reported Broadcom’s $19.1 billion revenue outlook versus a consensus estimate around $18.27 billion. [8]
So why did the stock sell off so aggressively?
The key issue: Broadcom says margins will dip as AI becomes a bigger mix
The single line that changed the market’s reaction was about profitability.
On the earnings call, Broadcom signaled that gross margin will likely decline about 100 basis points (1 percentage point) sequentially, “primarily reflecting a higher mix of AI revenue,” according to CFO Kirsten Spears, as reported by Reuters. [9]
Investopedia highlighted the same dynamic: AI revenue growth is accelerating, but investors focused on the implication that more AI can mean lower margins in the near term—especially if systems sales become a larger part of the mix. [10]
Reuters also emphasized customer concentration and mix-shift risk, noting commentary that the backlog is tied to a small number of customers and may include systems that can carry lower gross margin than other products. [11]
This is the heart of the AVGO debate right now:
Broadcom is proving it can win massive AI deals—but investors are re-pricing what those deals are worth if the margin profile compresses as they scale.
AI demand is real: backlog visibility is huge, but investors want more detail
Broadcom’s management disclosed a major AI order backlog, and Reuters reported CEO Hock Tan said the company has a backlog of $73 billion that it expects to ship over the next 18 months. [12]
Reuters also reported that Broadcom has secured massive AI contracts this year, including $21 billion from Anthropic across recent quarters related to Google’s custom chips. [13]
But some investors appeared to want more explicit longer-term guidance—particularly for AI revenue beyond the near-term quarter—after a massive run in the stock earlier in 2025. Business Insider described investor disappointment around the level of detail on future AI revenue and how the backlog was framed. [14]
That gap between “strong demand” and “detailed visibility” is now one of the market’s biggest swing factors for Broadcom stock heading into 2026.
Wall Street price target updates: UBS raises to $475 on Dec. 15, others stay bullish
Despite the volatility, analyst sentiment has remained broadly constructive—and several firms have raised targets in the wake of earnings.
Today’s headline change (Dec. 15): UBS lifts its AVGO price target
UBS analyst Timothy Arcuri raised Broadcom’s price target to $475 from $472 and kept a Buy rating, arguing that the sharp pullback looked like an overreaction and that management commentary supports higher FY26 expectations. [15]
Recent post-earnings target hikes (Dec. 12–15 window)
A sample of widely-circulated target changes includes:
- Morgan Stanley: raised to $462 from $443, kept Overweight [16]
- TD Cowen: raised to $450 from $405, kept Buy [17]
- Benchmark: raised to $485 from $385, kept Buy [18]
- KeyBanc: raised to $500 from $460, kept Overweight [19]
- BofA Securities: raised to $500 from $460, kept Buy [20]
- Citi: raised to $480 from $415, kept Buy [21]
While individual methodologies differ, the overall message is consistent: AI growth is pulling up multi-year estimates, even as some analysts adjust margin assumptions downward. Investopedia noted that Bank of America and Deutsche Bank, for example, flagged the margin concern while still lifting earnings estimates and price targets based on expected revenue growth. [22]
Broadcom stock forecast: where the Street’s “consensus” is clustering
Because “consensus price target” numbers vary by dataset and timing, it helps to look at the ranges being reported across major tracking sources:
- Nasdaq/Fintel data (published Dec. 12) cited an average one-year price target around $411.31, with forecasts ranging from roughly $220 to $562. [23]
- Another widely cited view (Investopedia, via Visible Alpha) pegged the average target higher (around the low-to-mid $400s) and described analysts broadly positive despite the post-earnings selloff. [24]
- Yahoo Finance coverage also pointed to analysts raising targets after earnings, with one report describing an increase in the price target to around $453. [25]
The takeaway for Dec. 15 readers: bullish targets now commonly sit in the $475–$500 zone, while many “base case” targets cluster in the low-to-mid $400s.
Valuation check: Broadcom is priced like a premium AI winner
Even after the pullback, Broadcom is not being valued like an average semiconductor stock.
Reuters reported Broadcom trading at about 32x enterprise value to forward core earnings, compared with about 19.6x for Nvidia and 30.2x for AMD. [26]
That premium valuation is both a vote of confidence and a risk factor:
- Confidence, because the market is pricing Broadcom as a durable AI infrastructure supplier, not a cyclical chipmaker.
- Risk, because a premium multiple can compress quickly if margins slip or if customer concentration becomes a bigger concern.
That valuation pressure is part of why a “beat and raise” quarter still triggered a steep selloff.
The bull case for AVGO: custom AI silicon + networking becomes a core hyperscaler spend bucket
Broadcom’s narrative is stronger than a single product cycle. The company sits in multiple “must-have” layers of AI infrastructure:
- Custom AI accelerators (ASICs / XPUs) for hyperscalers looking to optimize cost, performance, and control
- AI networking (especially Ethernet switching), which grows alongside AI cluster scale-out
- Infrastructure software, including the VMware portfolio, which broadens cash flow and customer reach [27]
On Dec. 15, Nasdaq’s commentary framing of the stock emphasized that Broadcom’s AI revenue growth is changing the mix of the business, while also warning that valuation has become “very expensive.” [28]
In short: bulls argue Broadcom is becoming one of the most important “picks and shovels” providers for the AI era—especially for customers that don’t want to rely solely on GPUs.
The bear case: margin mix, customer concentration, and “AI return on investment” anxiety
The bearish pushback isn’t that AI demand is disappearing. It’s that the market is questioning the quality and durability of the profits attached to that demand.
Key pressure points highlighted in recent coverage include:
- Lower-margin AI mix: management-guided margin compression tied to AI revenue mix. [29]
- Customer concentration: Reuters noted backlog still tied to only five customers, and that systems sales could be a bigger factor in later quarters. [30]
- AI payback skepticism: Reuters described intensifying scrutiny of Big Tech AI spending and renewed “AI bubble” fears after the Oracle/Broadcom one-two punch. [31]
This is why Broadcom is being treated as a bellwether: the market is effectively stress-testing whether AI infrastructure growth is translating into predictable, high-quality earnings—or whether the economics change as deployments scale.
What to watch next: the handful of catalysts that could move Broadcom stock
Heading into year-end and early 2026, these are the main swing factors for AVGO:
- Gross margin trajectory in fiscal Q1 2026: investors want to see whether the 100-basis-point dip is “contained” or the beginning of a longer compression trend. [32]
- AI revenue pacing beyond one quarter: management guided $8.2B for the quarter; the next question is what FY26 looks like in a more explicit way. [33]
- Backlog conversion and customer diversification: more names (and less concentration) would likely support the multiple. [34]
- Dividend timing: Broadcom raised its quarterly dividend to $0.65, payable Dec. 31 to shareholders of record Dec. 22—a near-term item many income-focused investors track. [35]
- Macro data and rate expectations: Dec. 15 market framing has been heavily shaped by upcoming jobs and inflation reports, which can quickly change risk appetite for high-multiple tech. [36]
Bottom line on Broadcom stock on Dec. 15, 2025
Broadcom stock is trading through a classic late-cycle AI setup: fundamentals are strong, but the bar is higher. The company posted record revenue, strong cash flow, and guided to another step-up in sales—powered by a dramatic ramp in AI semiconductor revenue. [37]
At the same time, management’s margin commentary has shifted the conversation from “how fast can AI revenue grow?” to “how profitable is AI revenue as it becomes a larger share of the business?”—and that question is now driving day-to-day volatility. [38]
Wall Street’s reaction on price targets has leaned bullish (including UBS’s target increase to $475 today), but the stock’s premium valuation means Broadcom will likely need to show that the margin dip is manageable and that backlog converts cleanly to earnings—not just sales. [39]
References
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