Broadcom’s Grave Error: Making Slightly Less Than Infinite Money From AI

Oh, the humanity! A moment of silence, if you please, for the long-suffering investors of Broadcom Inc. The chip giant had the absolute audacity to report that its AI sales outlook was merely “robust” instead of, presumably, “capable of funding an expedition to colonize Andromeda by next Tuesday” [1, 2].

The market, in its infinite and unquestionable wisdom, immediately responded by handing Broadcom its worst stock decline in over 10 months. How dare they present anything less than a plan for total universal domination? We were clearly hoping for a quadrillion dollars, not a mere trillion [2].

A Financial Report So Good, It’s Apparently Bad

Let’s take a moment to sift through the rubble of this “disappointing” financial report. What horrors did it contain?

A record Q4 revenue of 8.0 billion (a measly 28% increase year-over-year) [3, 4].
AI semiconductor revenue surging by a completely underwhelming 74% year-over-year [3].
Non-GAAP earnings per share that cruelly beat Zacks Consensus estimates by 4.3% [4].
And to add insult to injury, they raised the quarterly dividend by 10% [4].

You can see why everyone is so upset. This is clearly a company on the brink of collapse.

A “Bleak” Future Paved With Gold

CEO Hock Tan, bless his heart, tried to put a brave face on this catastrophe. He mumbled something about AI being the “primary driver” for these record results and forecasted that Q1 fiscal 2026 AI revenue would *double* year-over-year to a nearly-respectable .2 billion [3, 4].

If that wasn’t enough of a downer, the company is also tragically sitting on a 3 billion AI backlog for the next 18 months, with the potential for AI sales to hit **00 billion in fiscal 2027** [9, 6]. It’s a truly grim picture of barely-controlled, explosive growth.

So What’s the Real Problem? Oh, Right, ‘Feelings’

Why the long faces on Wall Street? Our highly-caffeinated analyst friends have pointed to a terrifying cocktail of concerns:

Profit-Taking: Some investors were forced to sell after the stock *only* gained 75% year-to-date in 2025 [5]. A truly harrowing ordeal that no human should have to endure.
“AI Angst”: A terrifying new affliction where making mountains of cash from custom AI processors is bad because the margins might be slightly thinner than on other products [7, 8]. The horror! More revenue, but a marginally smaller percentage of it is pure profit? Unacceptable!
Lofty Expectations: This is the big one. Investors, in their fever dream, modeled a reality where revenue growth and margin growth were intertwined in a beautiful, ever-expanding fantasy. When Broadcom presented a slightly less fantastical (but still wildly successful) reality, the bubble of “AI payoff jitters” burst [5, 10, 11].

In essence, Broadcom is being punished for delivering a masterpiece when the audience had pre-ordered a miracle. The company is posting record numbers and leading a technological revolution, yet it’s not enough to placate the endless hunger of the market, leading to whispers about an “AI bubble” [12].

Perhaps Broadcom’s next innovation should be a chip that prints stock certificates out of thin air. Only then might its long-suffering shareholders finally find peace.

Broadcom’s Grave Error: Making Slightly Less Than Infinite Money From AI

A Financial Report So Good, It’s Apparently Bad

A “Bleak” Future Paved With Gold

So What’s the Real Problem? Oh, Right, ‘Feelings’

Sources:

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