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To: Julius Wong who wrote (95563)	12/12/2025 10:26:07 AM
From: Julius Wong	1 Recommendation Recommended By Return to Sender Respond to of 95572

Broadcom praised by Wall Street even as investors express concern Dec. 12, 2025 7:55 AM ET By: Chris Ciaccia, SA News Editor Broadcom ( AVGO) was in focus on Friday after the software and semiconductor giant received substantial praise from Wall Street firms after its latest results and guidance. However, shares erased a post-earnings jump and fell more than 5% in premarket trading that some attributed to concerns about margin compression. “Overall, these are very good results, showing near term upside to overall [numbers] for the first time in a while,” Morgan Stanley analyst Joseph Moore wrote in a note to clients. “Every quarter in CY25 has driven longer term expectations higher, as they have expanded from 3 customers to 5, given optimistic [serviceable addressable market] targets for CY27, amid positive reports on TPU v7; AI revenues have been above our estimates, mostly offset by weaker non AI semis. This quarter showed more of a short term inflection as well, guiding overall revenues and EPS further above our estimates than we had seen previously, and guiding AI 20% above our estimates for the January quarter.” Moore has an Overweight rating on Broadcom and upped his price target to $462 from $443 after the results. He did, however, express some concern about the revelation that Anthropic ( ANTHRO) is the company that had a $10B order with Broadcom and has another $11B order from them, and what it could ultimately mean for Broadcom. “First, these are products based on Google's ( GOOG) ( GOOGL) TPU architecture, and per comments on the sell side call there may be some margin going to Google on the Anthropic sale; more significantly, the fact that this is a full system rack sale will mean materially lower gross margins,” Moore added. “Management has said that it will be lower, but doesn't want to quantify given uncertainties. We are assuming mid 40% range, but it could be higher or lower. This $21B number is a much smaller number of units per $ vs. the card sales to other cloud customers, Separately, we don't know how repeatable this business is in CY27. A smaller [number] of units driving such a large amount of revenue does inject some variance into the model. The company's comment on the call that they have $73B of AI backlog shippable in the next 18 months could imply declines in 1h27, but we would assume that new orders will come for that time frame; but with over $90B of AI revs in the next 18 months 1h sequential revenue growth is modest. 1H27 is hard to call without knowing if there are repeat orders from Anthropic. We note that the company was less definitive about 2027 growth accelerating vs. the last earnings call, which is understandable given the increase to 2026.” Jefferies analyst Blayne Curtis also upped his price target after the results and guidance, and said that Broadcom's AI story is “expanding,” though he acknowledged some investor concerns. “The expansion of the external TPU storyline continues with an $11B follow-on order from Anthropic for Q426,” Curtis wrote in a note to clients. “A 5th unnamed customer (likely not OpenAI, maybe AAPL) signed during the quarter, starting a multi-year custom XPU program. AI backlog over the next 6 quarters was noted to be $73B. There were some investor concerns that this did not signal enough upside for C26, but we do believe orders for 2H will still be placed. There is also a bit of a transition here in terms of messaging, where AVGO provided more color on the out years when the near term was as strong but now that AI is ramping, the guide was more focused on the quarter ahead.” Wells Fargo analyst Aaron Rakers also said AI momentum is “accelerating,” as pointed to the increase in backlog in Broadcom's comments on fiscal 2027. Rakers upped his price target on Broadcom to $410 from $345, wrote in a note to clients.

To: Julius Wong who wrote (95563)

12/12/2025 1:12:29 PM

From: Return to Sender

Read Replies (1) | Respond to of 95572

Broadcom Bombs?

"Broadcom Suffers Worst Stock Drop Since 2020 on Slow Chip Sales" - Bloomberg
"Tech Slides as Broadcom Adds to AI Disillusionment" - DJ
"Broadcom sees dip in quarterly margins due to AI" - Reuters

Shares of Broadcom ( AVGO) are having a rough go this morning after the company reported earnings after the close yesterday.

Despite reporting better-than-expected EPS and sales, as well as raising guidance, the stock is down around 9% this morning as management comments concerning margins and backlog spooked investors.

Several analysts have said the comments were misinterpreted, but the stock's reaction this morning tells another story.

Based on where the stock is trading this morning, today would be just the 7th time since at least 2009 that the stock declined more than 5% on an earnings reaction day, and if it stays at current levels through the close, it would go down as its second-worst earnings reaction day on record.

What's interesting to note about the performance above, however, is that heading into today, the stock's two worst earnings reaction days were in 2024.

Despite those two clunker earnings reports, heading into today, AVGO has rallied over 275% since the start of 2024, making it the seventh-best-performing stock in the S&P 500!

Getting back to those headlines at the top, two were written in reaction to AVGO earnings reports, but not yesterday's.

Only the Reuters headline was in reference to the most recent report, but the Dow Jones headline was written in response to its September 2024 report, while the Bloomberg headline pertained to its March 2004 report.

In both cases, there was widespread concern over AVGO's results, but the declines are barely visible on the chart!