Broadcom beats estimates, but the stock plummets on the stock exchange. Here's why

On the AI front, the management reiterated very ambitious expectations: expected revenues of EUR 8.2 billion in the first quarter, doubling year-on-year, and a total backlog of EUR 73 billion to be fulfilled in the next 18 months. However, during the conference call, investors showed caution in the face of a high concentration of orders and visibility that, although described as 'high', remains strongly tied to a few large customers.

In this context, the identification of Anthropic as a new major customer - with USD 11 billion of additional AI chip orders for 2026 - was not enough to reassure the market. Even the announcement of a fifth customer with orders worth USD 1 billion seemed insufficient to compensate for the lack of news about other potential prime contractors.

The downgrading of expectations on OpenAI also weighed in. Broadcom made it clear that it did not expect a significant contribution from its partnership with the ChatGPT developer in 2025-2026, postponing the most significant economic impact to 2027. This has cooled growth prospects in the medium term, just as the market was looking for signs of further acceleration.

The analysts' rating remains positive overall, but accompanied by more selective tones. Susquehanna has confirmed its Positive rating with a target price of USD 450, while Piper Sandler maintains an Overweight recommendation, pointing out that the stock can only become attractive again in the presence of phases of weakness.

In summary, the negative market reaction does not question Broadcom's operational strength, but reflects a more fragile balance between growth, risk concentration and valuation. After months of strong gains, even better-than-expected results were not enough to avoid a correction, signalling how, in the current phase, it is not just the numbers that count for the market, but the degree of surprise they can still offer.