Broadcom earnings, guidance beat estimates, but stock fell 5% post-market; Here's why

Broadcom Inc., a chip manufacturing company, competing with Nvidia for revenue from the Artificial Intelligence segment, reported results after market hours on Thursday that beat expectations, as did the company's guidance. However, the stock fell as much as 5.5% in extended trading on Wall Street.

Broadcom reported fourth quarter revenue of $18.02 billion, higher than the $17.49 billion estimated by analysts, while its Earnings Per Share (EPS) stood at $1.95, which was also higher than the $1.86 estimate.

The company projected first quarter revenue to be $19.1 billion, implying a growth of 28% from last year, and also higher than the average analyst estimate of $18.3 billion. CEO Hock Tan said that revenue from the AI chip sales will double in the first quarter, compared to the same period last year.

Yet, the stock fell in afterhours trading. Multiple aspects focused on by the company during the earnings call, did not please the street.

First, the company disclosed an order backlog of $73 billion in AI product orders that will be shipped over the next six quarters, a number that did not impress investors, as they expected more. However, CEO Tan said that the figure was a "minimum."

“We do expect much more as more orders come in for shipments within that next six quarters,” he said. “So our lead time, depending on the particular product it is, can be anywhere from six months to a year.”

Tan also said that the company received an $11 billion order from Anthropic during the fourth quarter, but margins were narrowing due to the AI product sales.

Broadcom also did not give a revenue forecast from the AI segment for 2026.

"It’s a moving target,” Tan said. “It’s hard for me to pinpoint what 2026 is going to look like precisely. So I’d rather not give you guys any guidance," CEO Tan said during the earnings call.

Broadcom has also signed on another customer for a $1 billion order, but did not disclose the name of the same.

The Palo Alto, California-based company has a wide-ranging lineup that spans communications chips, networking components and software.

Anthropic's $11 billion order in the fourth quarter follows a $10 billion in the third. OpenAI had also signed a deal with Broadcom for its own AI chip designs.

Shares of Broadcom had ended 1.6% lower in regular trading on Thursday before the results announcement. The stock has risen 75% so far in 2025 before the fall in extended trading.

(With Inputs From Agencies)