By Daniel Sparks
Publication Date: 2025-12-16 17:00:00
Key Points
Broadcom’s stock slid after its Dec. 11 earnings update.
Management warned that its fast-growing AI business may negatively impact its gross profit margin.
Even after the pullback, the stock still seems priced for near-perfect execution.
- 10 stocks we like better than Broadcom ›
Broadcom (NASDAQ: AVGO) shares have fallen about 18% from recent highs, with much of that decline coming when the semiconductor and data-center networking specialist reported fiscal fourth-quarter results and issued guidance for the current quarter.
Interestingly, the drop was not sparked by weak sales. In fact, sales soared during the quarter. So what caused the stock to get hammered? It boiled down to what management said about profitability as AI revenue becomes a larger slice of the business. In short, management said in its fiscal fourth-quarterearnings callthat it expects sales of its AI (artificial intelligence)-related products to be dilutive to its
