Broadcom $AVGO ( ▲ 1.98% ) beat expectations on revenue and earnings and issued strong guidance for the current quarter, but the stock sank after executives revealed slower momentum in new major customer wins. The company expects AI semiconductor revenue to double year over year to $8.2 billion in Q1, which is about 20% above Wall Street forecasts. Broadcom also raised its quarterly dividend to $0.65 from $0.59.
During the conference call, CEO Hock Tan identified Anthropic as the previously announced $10 billion mystery customer and said the AI startup has placed an additional $11 billion order. Broadcom also secured a $1 billion order from a fifth major AI chip customer, though investors appeared underwhelmed by the size of that deal relative to prior announcements. Tan added that margins will compress as AI revenue continues to scale.
Broadcom now has a $73 billion AI backlog it expects to fulfill over the next 18 months, which Tan described as a minimum for sales across the next six quarters. He also said the company does not expect its recently announced partnership with OpenAI to drive meaningful revenue in 2026.
The stock was up as much as 4 percent immediately after the results but reversed sharply during the call. The reaction reflects concerns that Broadcom’s pace of major customer wins is not keeping up with investor expectations, especially after a period when the stock dramatically outperformed competitors like Nvidia $NVDA ( ▲ 3.74% ) and AMD $AMD ( ▲ 6.87% ) .