Broadcom set a $19.1 billion revenue target for Q1 fiscal 2026 and said a record $73 billion backlog from surging AI semiconductor demand gives roughly 18 months of visibility for growth; fiscal 2025 revenue rose 24% to a record $64 billion, with AI revenue up 65% to $20 billion and VMware adding to results. Management cautioned that a heavier AI product mix could pressure gross margins but expects operating income to increase through scale and leverage, and is investing in an advanced-packaging facility in Singapore to ease supply bottlenecks. Investors will be watching how quickly Broadcom converts the backlog into revenue and whether margins hold as AI becomes a larger part of the business.
Broadcom set a $19.1 billion revenue target for Q1 fiscal 2026 and reported a record $73 billion backlog driven by surging AI semiconductor demand. Fiscal 2025 revenue rose 24% to $64 billion, with AI revenue up 65% to $20 billion, and VMware's integration added materially to results, signaling both product- and M&A-driven growth. Management warned that a heavier AI product mix could weigh on gross margins even as operating income is expected to increase through scale and leverage, indicating potential margin compression offset by operating leverage. The company is investing in an advanced-packaging facility in Singapore to relieve supply-chain bottlenecks and support accelerating orders. The $73 billion backlog gives roughly 18 months of revenue visibility, but the critical near-term questions are the speed of backlog conversion and the evolution of margin trends as AI becomes a larger share of sales. Execution risk around the Singapore facility and the cadence of capex will affect the timing of supply relief and margin recovery, making the next earnings cycle a decisive inflection point for investors.
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