Broadcom (Broadcom) Q4 earnings surpass expectations! After securing a billion-dollar order from Google TPU, the stock price dropped by 4.6%

Google’s key partner in developing TPU, Broadcom (Broadcom), delivered an impressive financial report, with Q4 revenue reaching $18 billion, surpassing expectations of $17.49 billion, a 28% year-over-year increase, setting a new record. Adjusted earnings per share (EPS) were $1.95, up 37% year-over-year, beating the expected $1.86. However, CEO Fuyang Chen stated that it is inconvenient to provide a forecast for AI revenue in 2026, which caused market panic, and the stock price fell by 4.6%.

Broadcom’s Q4 earnings were outstanding, with revenue and EPS both exceeding expectations

The 2025 Q4 financial report showed an impressive performance, with revenue reaching $18 billion, exceeding the expected $17.49 billion, a 28% annual increase, and a new record high. Adjusted EPS was $1.95, up 37% year-over-year, surpassing the expected $1.86.

CEO Fuyang Chen (Tan Hock Eeng) revealed astonishing AI demand data during the conference call, with Q4 AI revenue reaching $6.5 billion, a 74% increase year-over-year. Holding AI-related orders amounting to as much as $73 billion (including customized chips XPU, switches, DSPs, etc.), the total order backlog reached $162 billion, expected to be shipped within the next 18 months; just the AI switch backlog exceeds $10 billion. Delivery is planned within the next 18 months.

Fuyang Chen also confirmed for the first time during the conference call that the previously rumored mysterious major customer is the AI startup giant Anthropic, which signed a billion-dollar order involving Google TPU (Ironwood project), and this quarter added another $1.1 billion order. Additionally, they announced signing a fifth customer for customized chips (XPU), with the first order valued at $1 billion.

Industry concerns about revenue structure shift: high revenue, low gross profit

Analyst Stacy Rasgon asked about gross margin data during the conference call, and Broadcom CFO Kirsten Spears admitted that as the company begins selling complete AI server racks that include third-party components like memory and cooling, future gross margins will face pressure.

While this can bring higher total revenue and absolute profit, the low profit margins of hardware assembly operations compared to chip design will lead to a decline in overall gross margin percentage. The market is sensitive to this structural shift toward high revenue and low gross profit.

The most long-term risk in the industry is customer internalization. Broadcom’s main customers, such as Google (, possess strong resources, and there are concerns that these tech giants will eventually fully master chip design capabilities or shift to collaborating with other design firms, thereby abandoning Broadcom.

In response to this concern, Fuyang Chen strongly countered, stating that the idea of customers completely switching to self-developed tools is an overblown hypothesis. He pointed out that the technological evolution of customized AI accelerators (XPU) is rapid, and Broadcom owns exclusive IP (such as SerDes, high-speed transmission interfaces) and packaging technology. For customers, working with Broadcom can achieve more powerful chips faster than going it alone. He emphasized that this is a long-term strategic journey, and Broadcom’s technological moat is hard to cross easily.

The key reason for the stock price turning from rise to fall despite better-than-expected earnings is that Broadcom did not provide a forecast for AI revenue in 2026. Fuyang Chen stated, “The market changes rapidly; I find it difficult to predict what 2026 will look like, so I am not able to give guidance.”

This article about Broadcom )Broadcom('s Q4 earnings exceeding expectations, securing a billion-dollar order from Google TPU, yet the stock falling 4.6%, first appeared on Chain News ABMedia.