Broadcom (AVGO) Earnings Preview: AI Growth in Focus as Non-AI Revenue Expected to Stabilize

Broadcom is set to release its fourth-quarter earnings after the close, with investors watching closely for signs of stabilization in non-AI semiconductor revenue and continued strength in AI-driven demand. The company, which has consistently outperformed consensus estimates, faces heightened scrutiny following a rare downbeat guidance for the prior quarter.

Broadcom is expected to report adjusted earnings of $1.39 per share and revenue of $14.07 billion, reflecting 51 percent year-over-year growth. The company’s guidance of approximately $14.0 billion in Q4 revenue suggests this quarter could mark a bottom for its non-AI semiconductor segment, which has weighed on results over the past several quarters. Management previously noted signs of stabilization in this segment, signaling that demand had likely reached its nadir.

AI revenue remains the bright spot for Broadcom. The company projects AI-related revenue to rise 10 percent sequentially to $3.5 billion in Q4, contributing to full-year AI revenue of $12 billion, an upward revision from earlier expectations. This growth highlights the increasing reliance on AI as a key driver for Broadcom’s overall business, offsetting weaker performance in other semiconductor categories.

Apple, a major customer for Broadcom, also features prominently in the company’s outlook. The latest iPhone lineup, with enhanced AI-related features, has fueled optimism for Broadcom’s wireless revenue, which is expected to grow over 20 percent sequentially in Q4.

However, this optimism is tempered by reports that Apple is exploring a transition to in-house components for certain connections, which could impact Broadcom’s revenue in future quarters.

Broadcom’s stock has been trading near its six-month resistance level of $185, a threshold it has struggled to consistently break. If Q1 guidance suggests that Q4 marked the anticipated bottom in non-AI revenue, investor confidence could push shares to new all-time highs. Conversely, a less optimistic outlook could trigger a retreat toward the 200-day moving average of $154.42, which has provided strong support since August.

Investors will also look for detailed commentary from management on the performance of Broadcom’s various business segments. Insights into demand trends across AI, wireless, and other semiconductor markets will be critical in evaluating the company’s growth trajectory.

Broadcom’s Q4 results will serve as a bellwether for its recovery in non-AI markets and its ability to sustain robust growth in AI-related revenue. With shares near record highs and expectations running high, Broadcom’s performance and guidance will need to meet or exceed expectations to maintain investor confidence. For now, all eyes are on whether the company can turn the corner in its non-AI semiconductor business while continuing to capitalize on the AI boom.