Broadcom Shares Up 60% YoY, Q1 AI Revenues Seen Doubling to $8.2B
Broadcom’s shares have soared 60% over the past 12 months, significantly outperforming the broader tech sector’s 25.2% and semiconductor industry’s 53.2% returns. The company forecasts first-quarter fiscal 2026 AI revenues to double to $8.2 billion and reports an AI switch backlog exceeding $10 billion.
1. Shares Outperform Sector and Industry
Broadcom’s stock has risen 60% over the trailing 12 months, compared with a 25.2% gain for the Zacks Computer and Technology sector and a 53.2% increase for the Electronics – Semiconductors industry. This outperformance highlights investor confidence in the company’s growth trajectory and innovation pipeline.
2. AI Revenue Growth and Backlog
Management expects first-quarter fiscal 2026 AI revenues to double year over year to $8.2 billion, driven by strong demand for application-specific XPUs used in generative AI training. The company’s AI switch order backlog on its 102-terabit per second Tomahawk 6 platform has surpassed $10 billion, underscoring robust hyperscaler and cloud provider demand.
3. Product Portfolio Expansion and Competition
Broadcom has introduced the first Wi-Fi 8 silicon solutions and launched new 5G massive MIMO radio DFE SoCs to expand its connectivity and wireless infrastructure offerings. Despite stiff competition from NVIDIA’s Hopper architectures, AMD’s EPYC processors and Skyworks’ IoT solutions, Broadcom’s diversified product suite and rich partner base—including OpenAI, Meta and Dell—support its premium valuation.
4. Margin Guidance and Tax Headwinds
Fiscal 2026 guidance reflects a softer gross margin due to a higher AI revenue mix, a sequential decline in non-AI semiconductor sales and modest software growth. The company also faces a higher tax rate from global minimum tax implementation and a shift in geographic income mix.