Broadcom(US:AVGO) Zhi Tong Cai Jing·2025-12-12 00:44Core Viewpoint - Broadcom's stock price fell in after-hours trading following the release of its Q4 earnings, which showed slightly disappointing AI backlog orders despite strong revenue growth [1] Financial Performance - For Q4, Broadcom reported sales of $18 billion, a 28% year-over-year increase, exceeding analyst expectations of $17.5 billion [1] - The company's earnings per share rose to $1.95, surpassing the expected $1.87 [1] - Semiconductor revenue reached $11.07 billion, up 34.5% year-over-year, while infrastructure revenue grew 19% to $6.94 billion [1] AI Orders and Market Sentiment - Broadcom has a backlog of $73 billion in AI product orders, which will be delivered over the next six quarters, a figure that disappointed some investors [1] - CEO Hock Tan clarified that this backlog is a "minimum value" and expects significant increases in delivery volumes as more orders come in [1] - The company secured $11 billion in orders from AI startup Anthropic PBC in Q4, building on a previous $10 billion order [1] Future Outlook - For Q1, Broadcom anticipates sales of approximately $19.1 billion, above analyst expectations of $18.5 billion [2] - AI semiconductor revenue is expected to double year-over-year to $8.2 billion [2] - The company raised its quarterly dividend by 10% to $0.65 per share [2] Stock Valuation - Broadcom's stock has surged 75% year-to-date, leading to a historical high valuation with a forward P/E ratio of about 42, compared to a 10-year average of 17 [2] - The high valuation raises concerns that even strong performance may not satisfy market expectations, potentially leading to sell-offs [2] Market Position and Partnerships - Broadcom benefits from the growing demand for custom chips driven by large-scale data center construction, capturing a larger market share in the AI chip sector [3] - The company has partnerships with major AI model providers, including OpenAI, which will use Broadcom's products in its AI chip designs [3] - Broadcom's AI chip revenue grew over 70% last quarter, indicating a significant increase in demand [3] Strategic Initiatives - Broadcom is upgrading its networking equipment to enhance data transmission speeds, crucial for supporting increasingly complex AI models [5] - Collaborations with major cloud service providers like Google and Meta Platforms involve designing custom AI processors, providing an alternative to NVIDIA's GPUs [5]