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Why Broadcom Shares Are Pulling Back Ahead of Earnings

MarketDash Editorial Team
12 hours ago
Broadcom investors are taking a cautious stance Thursday as the semiconductor giant prepares to report fiscal fourth-quarter results after the close. Despite trading near 52-week highs, shares are dipping as traders await critical AI revenue updates and 2026 guidance.

Broadcom Inc. (AVGO) shares are sliding Thursday, and it's not because anything has gone wrong. The chip designer is set to report fiscal fourth-quarter earnings after the bell, and investors seem to be taking a deep breath before the numbers hit.

Sometimes the market gets nervous before big moments, and this appears to be one of those times.

What's Expected

Analysts are looking for Broadcom to deliver earnings of $1.86 per share, a solid jump from $1.42 per share in the same quarter last year. Revenue estimates are calling for $17.49 billion compared to $14.05 billion in the prior year's quarter, according to market data.

The company has a pretty stellar track record here. Broadcom has beaten revenue expectations in three consecutive quarters and in eight of the past 10. On the earnings side, it's topped EPS estimates in 9 of the last 10 quarters. That's the kind of consistency that usually makes investors happy.

But even with that track record, there's some hesitation in the air. Investors want to see how Broadcom's AI revenue growth is holding up and what management has to say about fiscal 2026 guidance. Oracle's lackluster earnings reaction earlier this week probably isn't helping the mood either. Add in the fact that Broadcom is trading near 52-week highs, and you've got a recipe for some pre-earnings jitters.

The AI Revenue Story

In the previous quarter that ended Aug. 3, 2025, Broadcom posted $15.95 billion in revenue, up 22% year-over-year. Adjusted EPS came in at $1.69, with adjusted EBITDA hitting $10.7 billion, representing 67% of revenue.

CEO Hock Tan highlighted that AI revenue surged 63% to $5.2 billion in the third quarter, driven by strong demand for custom AI accelerators, networking products, and VMware. The company projected fourth-quarter AI semiconductor revenue would climb to $6.2 billion, which would mark the 11th consecutive quarter of growth. That's the kind of streak that gets attention.

Broadcom also generated $7.17 billion in operating cash flow last quarter, with free cash flow of $7.024 billion, representing 44% of revenue. Those are impressive numbers that show the company isn't just growing, it's generating serious cash while doing it.

For the fourth quarter, management had guided revenue to about $17.4 billion, which would represent a 24% increase from last year. Analysts are expecting slightly higher numbers when the report drops after the close.

Technical Picture

Broadcom is currently trading about 12.4% above its 50-day moving average of $360.09 and approximately 45.5% above its 200-day moving average of $278.18. That significant distance from both moving averages signals strong bullish momentum over the medium to long term, though recent price action suggests we might be entering a consolidation phase as the stock tests the upper end of its range.

The 52-week range of $138.10 to $414.61 tells the story of an impressive recovery and growth trajectory. That recent high of $414.61 represents a key resistance level, while the low of $138.10 serves as a strong support base that investors might look to during volatile periods.

Volume on Thursday reached 18.3 million shares, reflecting active trading as investors position themselves ahead of the earnings release. That kind of volume indicates heightened interest and could lead to increased volatility as traders react to whatever management reports.

Price Action: Broadcom shares were down 1.87% at $405.23 at the time of publication Thursday, trading near the 52-week high of $414.61.

Back to News

Why Broadcom Shares Are Pulling Back Ahead of Earnings

MarketDash Editorial Team
12 hours ago
Broadcom investors are taking a cautious stance Thursday as the semiconductor giant prepares to report fiscal fourth-quarter results after the close. Despite trading near 52-week highs, shares are dipping as traders await critical AI revenue updates and 2026 guidance.

Broadcom Inc. (AVGO) shares are sliding Thursday, and it's not because anything has gone wrong. The chip designer is set to report fiscal fourth-quarter earnings after the bell, and investors seem to be taking a deep breath before the numbers hit.

Sometimes the market gets nervous before big moments, and this appears to be one of those times.

What's Expected

Analysts are looking for Broadcom to deliver earnings of $1.86 per share, a solid jump from $1.42 per share in the same quarter last year. Revenue estimates are calling for $17.49 billion compared to $14.05 billion in the prior year's quarter, according to market data.

The company has a pretty stellar track record here. Broadcom has beaten revenue expectations in three consecutive quarters and in eight of the past 10. On the earnings side, it's topped EPS estimates in 9 of the last 10 quarters. That's the kind of consistency that usually makes investors happy.

But even with that track record, there's some hesitation in the air. Investors want to see how Broadcom's AI revenue growth is holding up and what management has to say about fiscal 2026 guidance. Oracle's lackluster earnings reaction earlier this week probably isn't helping the mood either. Add in the fact that Broadcom is trading near 52-week highs, and you've got a recipe for some pre-earnings jitters.

The AI Revenue Story

In the previous quarter that ended Aug. 3, 2025, Broadcom posted $15.95 billion in revenue, up 22% year-over-year. Adjusted EPS came in at $1.69, with adjusted EBITDA hitting $10.7 billion, representing 67% of revenue.

CEO Hock Tan highlighted that AI revenue surged 63% to $5.2 billion in the third quarter, driven by strong demand for custom AI accelerators, networking products, and VMware. The company projected fourth-quarter AI semiconductor revenue would climb to $6.2 billion, which would mark the 11th consecutive quarter of growth. That's the kind of streak that gets attention.

Broadcom also generated $7.17 billion in operating cash flow last quarter, with free cash flow of $7.024 billion, representing 44% of revenue. Those are impressive numbers that show the company isn't just growing, it's generating serious cash while doing it.

For the fourth quarter, management had guided revenue to about $17.4 billion, which would represent a 24% increase from last year. Analysts are expecting slightly higher numbers when the report drops after the close.

Technical Picture

Broadcom is currently trading about 12.4% above its 50-day moving average of $360.09 and approximately 45.5% above its 200-day moving average of $278.18. That significant distance from both moving averages signals strong bullish momentum over the medium to long term, though recent price action suggests we might be entering a consolidation phase as the stock tests the upper end of its range.

The 52-week range of $138.10 to $414.61 tells the story of an impressive recovery and growth trajectory. That recent high of $414.61 represents a key resistance level, while the low of $138.10 serves as a strong support base that investors might look to during volatile periods.

Volume on Thursday reached 18.3 million shares, reflecting active trading as investors position themselves ahead of the earnings release. That kind of volume indicates heightened interest and could lead to increased volatility as traders react to whatever management reports.

Price Action: Broadcom shares were down 1.87% at $405.23 at the time of publication Thursday, trading near the 52-week high of $414.61.