Investors are concerned about Broadcom’s (AVGO) recent quarterly report, leading to an 11% drop in shares after the company reported a record $18 billion in revenue and 37% year-over-year earnings growth. The main concerns are the potential compression of margins due to increased AI revenue and the lack of full-year guidance.
However, the long-term outlook for Broadcom remains positive. Its AI revenue continues to grow at an incredible pace, with a 74% year-over-year increase in its last quarter. The company expects faster growth this quarter, forecasting $8.2 billion in AI revenue. This could translate to almost $48 billion over the next four quarters.
Broadcom’s non-AI business also shows potential for growth, with an 11% increase last year and a possible jump of 51% in revenue this year. The company is trading at expensive multiples but its accelerating growth justifies these valuations. As a result, many analysts still recommend buying the stock, with a median price target of $475 pointing toward 39% upside from current levels.
Source: https://www.fool.com/investing/2025/12/20/where-will-broadcom-stock-be-in-1-year