Street View: Broadcom's AI backlog raises eyebrows, but analysts stay bullish

Broadcom AVGO.O projected first-quarter revenue above Wall Street estimates on Thursday, but said that margins would fall due to a higher mix of AI revenue

Co reported revenue of $18.02 billion for the fourth quarter ended November 2, compared with estimates of $17.49 billion

Shares of semiconductor solutions provider fall nearly 4% to $389.5 in premarket

HOLD YOUR HORSES

HSBC ("buy," PT: $535) remains confident in its custom chip revenue estimates, which are higher than market expectations, and also sees a stronger AI networking outlook as management highlights significant backlog in this area over coming quarters

J.P. Morgan ("overweight," PT: $475) says after-market stock reaction suggests many investors believe the $73 billion AI backlog highlighted by management points to about $50 billion in AI revenue next year — softer than some had expected, but believes this conclusion fails to discern AI revenue “wood from the trees”

TD Cowen ("buy," PT: $450) says results and guidance are as expected, but focus shifts to 2H26, and upside from Anthropic, a key AI customer, adds momentum, while uncertainty around OpenAI and backlog makes clear conclusions difficult

Melius Research ("buy," PT: $530) expects AI revenue to double again in 2027 as OpenAI starts contributing, with more growth likely through 2029; it sees earnings of over $20 per share by 2028 as more likely