Broadcom Expects 27% EPS Growth to $2.03, AI Sales Near $8.2B Despite 23% Slide
Broadcom shares have slid 23% from their December record as investors question the sustainability of AI infrastructure spending despite trailing the S&P 500. Analysts forecast fiscal Q1 EPS of $2.03 (27% YoY), revenue of $19.3 billion (29% YoY), and nearly $8.2 billion in AI-related sales.
1. Share Performance and Market Sentiment
Broadcom shares have fallen roughly 23% from their December record high, underperforming the S&P 500 as investors rotate away from large-cap technology names. Market participants cite concerns over the durability of massive AI infrastructure investments and recent underwhelming reactions to semiconductor earnings.
2. Q1 Earnings Forecast
Wall Street expects fiscal first-quarter adjusted EPS of $2.03, up about 27% year over year, with revenue projected at $19.3 billion, a 29% increase. Semiconductor solutions revenue growth of 51% year over year to $12.4 billion is anticipated, driven by robust AI demand in custom accelerator chips.
3. AI Product Backlog and Google Collaboration
Broadcom disclosed a $73 billion backlog of AI products extending over the next six quarters, reflecting strong orders for tensor processing unit chips. Customers include major hyperscale developers such as Google, with TPU volume slated to ramp significantly in the second half of the year.
4. Risks and Geopolitical Headwinds
Investors are watching for margin compression pressures tied to elevated capital spending and China exposure, which accounts for about 20% of revenue. Competition for AI chip orders and potential guidance updates could sway sentiment, particularly as rival Nvidia has posted stronger-than-expected outlooks.