Broadcom’s Margin Warning Overshadows AI Revenue Growth, AVGO Stock Slides
Broadcom shares fell 4.4% in pre-market trading after CFO Kirsten Spears warned of a 100-basis-point decline in Q1 gross margins. The drop overshadowed strong Q4 results, where revenue hit $18.02 billion—beating estimates—and AI chip sales showed robust growth.
CEO Hock Tan projected Q1 revenue at $19.1 billion, well above consensus, with AI-related sales expected to double to $8.2 billion. Yet, market focus zeroed in on margin pressure from lower-profit system sales, triggering the selloff despite record EBITDA of $31.9 billion for fiscal 2024.