Broadcom 2025 Q4 Earnings 97% Net Income Surge Beats Estimates

Broadcom (AVGO) reported Q4 2025 results that exceeded expectations, with revenue rising 28.2% to $18.02 billion and EPS jumping 95.7% to $1.80. The company raised Q1 2026 guidance, projecting $19.1 billion in revenue and doubling AI semiconductor sales to $8.2 billion, signaling sustained momentum.

Revenue

Semiconductor solutions drove growth with $11.07 billion in revenue, while infrastructure software contributed $6.94 billion. The combined net revenue of $18.02 billion reflects a 28.2% year-over-year increase, fueled by AI semiconductors and infrastructure software demand.

Earnings/Net Income

Net income surged 97% to $8.52 billion, with EPS rising 95.7% to $1.80. This marks 11 consecutive years of profitability, underscoring Broadcom’s operational resilience and strategic execution.

Post-Earnings Price Action Review

The strategy of buying Broadcom shares post-earnings and holding for 30 days yielded moderate returns but underperformed the NASDAQ Composite. While the approach offered stability, its low Sharpe ratio suggests it prioritized capital preservation over aggressive growth. Investors seeking balanced exposure may still consider this strategy, though high-risk opportunities remain limited.

CEO Commentary

CEO Hock Tan highlighted a 74% AI semiconductor revenue growth, $73 billion in AI backlog, and strategic investments in custom XPUs and VMware. Supply chain resilience and Singapore’s advanced packaging facility were cited as key enablers for meeting AI demand.

Guidance

For Q1 2026, Broadcom projects $19.1 billion in revenue (28% YoY growth), with AI semiconductor sales doubling to $8.2 billion. Adjusted EBITDA is expected at 67% of revenue, while non-AI semiconductor revenue will remain stable.

Additional News

Broadcom announced a 10% increase in its quarterly dividend to $0.65 per share and extended its share repurchase program. The company also secured a $10 billion custom AI chip order from OpenAI and a multi-year partnership with Lloyds Banking Group to enhance digital infrastructure.