"Broadcom ( NASDAQ:AVGO ) delivered stellar fiscal fourth-quarter results earlier this month, with record revenue, beating analyst estimates. AI-driven growth powered the performance, yet the stock tumbled sharply afterward, dropping as much as 21% from $405 per share before the report to $321 per share in the following days. While Broadcom shares have since recovered some ground, they remain approximately 15% below their pre-earnings levels. This selloff is the result of a disconnect between strong fundamentals and the market's reaction. There are three key reasons behind the decline in Broadcom stock, but these concerns open up an opportunity for investors to buy at a lower price."
"Broadcom reported net revenue of $18 billion for the period, a 28% increase from $14 billion a year earlier. Semiconductor solutions revenue reached $11.1 billion, up 35% year-over-year, while infrastructure software contributed $6.9 billion, up 19%. AI semiconductor revenue was exceptionally strong, rising 74% year-over-year to $6.5 billion. Adjusted earnings came in at $1.95 per share, up 37% from the year-ago quarter, with adjusted EBITDA at $12.1 billion, for margins of 68%, which was also 34% higher than last year, allowing Broadcom to generate a 36% increase in free cash flow to $7.5 billion."
"While AI-related order backlog of over $73 billion - deliverable over 18 months - was substantial, representing nearly half of the consolidated $162 billion backlog, was lower than anticipated for the pace of AI demand. This backlog includes custom AI acc"
Broadcom delivered record fiscal fourth-quarter revenue of $18 billion, a 28% year-over-year increase, driven by semiconductor solutions and infrastructure software. AI semiconductor revenue rose 74% year-over-year to $6.5 billion. Adjusted EPS reached $1.95, adjusted EBITDA was $12.1 billion with 68% margins, and free cash flow increased 36% to $7.5 billion. Management guided Q1 revenue to $19.1 billion, forecasting AI semiconductor revenue to double to $8.2 billion and semiconductor revenue to about $12.3 billion. Despite these fundamentals, the stock fell as much as 21% and remains roughly 15% below pre-earnings levels amid investor concerns about AI backlog sizing.
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