Broadcom is expected to post Q1 2026 revenue of approximately $19.1 billion and adjusted EPS of $2.03, while the current stock price of $315.04 remains well below the $432.13 analyst consensus target. Investors are primarily focused on the growth of AI semiconductor revenue and the associated pressure on gross margins from a higher mix of hardware deliveries.
Management has guided for AI-related sales to nearly double year-over-year to $8.2 billion, fueled by a robust $73 billion backlog for custom accelerators and high-speed networking switches. However, concerns linger regarding a projected 100-basis point sequential dip in gross margins to roughly 77% as these lower-margin AI systems represent a larger share of the total business.