Broadcom's Record Earnings Decline Despite Insufficiency

Broadcom's Financial Quarterly Results and Investor Reactions

Broadcom (AVGO) announced its fourth quarter financial results for the 2025 fiscal year, and despite its strong performance, it fell short of investor expectations. The company reported a record revenue of $64 billion, marking a 24% increase year-over-year. This growth is attributed to significant contributions from artificial intelligence semiconductors and VMware.

Growth Driven by Artificial Intelligence Semiconductors

Revenue generated from artificial intelligence rose 65% to $20 billion, while total semiconductor revenues reached $37 billion for the year. Additionally, in the infrastructure software segment, revenue increased by 26% to $27 billion, thanks to the strong adoption of VMware Cloud Foundation.

Financial Performance and Orders

The company increased its adjusted EBITDA by 34% to $12.2 billion in the fourth quarter. Semiconductor revenues reached $11.1 billion, with revenue from artificial intelligence semiconductors showing a 74% increase to $6.5 billion. Furthermore, the acquisition of an additional $11 billion in new orders from Anthropic and a $1 billion order from the fifth XPU customer were other significant details that caught investors' attention.

Expectations for the Upcoming Period

The company expects to achieve approximately $19.1 billion in consolidated revenue for the first quarter of the 2026 fiscal year, representing a 28% year-over-year growth. Revenue from artificial intelligence semiconductors is anticipated to reach approximately $8.2 billion with nearly 100% growth. Additionally, infrastructure software revenue is expected to be around $6.8 billion, while semiconductor revenues are projected to be approximately $12.3 billion.

Finally, the company announced a 10% increase in its dividend per share, raising it to $0.65. However, despite all these positive figures, the stock experienced a decline, receiving a reaction below market expectations.