Broadcom (AVGO) Near Highs: AI Supercycle, VMware Shake-Up, and the Q4 Earnings Countdown

Broadcom (AVGO) on December 4, 2025: AI Supercycle, VMware Shake-Up, and the Q4 Earnings Countdown

Broadcom Inc. (NASDAQ: AVGO) sits at the center of the current AI and cloud build-out. As of mid-day December 4, 2025, shares trade near $380.61, just under record highs, with investors weighing blockbuster AI wins against a premium multiple and a closely watched earnings print on December 11.

The stock is up more than 120% over the past year, fueled by custom AI chips for hyperscalers and a bold VMware pivot to subscription software. That strength raises the bar: execution needs to keep pace with elevated expectations.

Price and valuation snapshot

• Price: ~$380.61 (about -0.25% intraday); 12-month range: ~$138-$403.
• Market cap: ~$1.80T; trailing P/E: ~97; PEG: ~1.3.
• Balance sheet: quick ratio ~1.37; current ratio ~1.50; debt-to-equity ~0.86.
• Ownership: insiders just over 2%; institutional around 76-80%.

Two forces are doing the heavy lifting: accelerating AI infrastructure demand and a higher-margin software mix from VMware. The risk is clear: any slowdown in AI spend or VMware profitability could hit a stretched multiple fast.

What's moving AVGO today

• BofA lifts target to $460 on Google TPU momentum. Broadcom is a key design partner for Google's TPUs. BofA flagged current AI accelerators at ~$5k-$6k per unit with ~2M units in 2025, potentially rising to ~$12k-$15k per unit and 3M+ units in 2026 if demand accelerates. Margins are modestly lower on AI compute, but the earnings path remains intact in their model.
• Q4 preview: record backlog and AI streak. Broadcom enters earnings with a reported ~$110B backlog tied to AI and infrastructure and a 10-quarter AI revenue growth streak. With a ~96-97x trailing P/E, even "good" may not be "good enough" if AI or VMware commentary cools.
• OpenAI custom chip collaboration. Reuters and OpenAI announcements this fall pointed to Broadcom as a core partner for OpenAI's first in-house AI processors and a multi-year accelerator plan around 10 GW. Shares jumped after a ~$10B AI chip order from a "fourth customer," widely linked to this effort. See coverage at Reuters and OpenAI.
• Short-term wobble on December 3. A mild pullback followed sector jitters tied to slower AI marketing by a major adopter. The move looked like profit-taking after a strong run rather than a shift in the thesis.

Earnings setup for December 11

Broadcom reports Q4 and full-year FY2025 on Thursday, December 11, after the close; call at 2:00 p.m. PT / 5:00 p.m. ET.

• Last reported quarter (Q3 FY2025): Revenue ~$15.95-$16.0B (+22% YoY); adjusted EPS ~1.69 (ahead of ~1.66 consensus); net margin ~31.6%; ROE ~36.6%. Street models FY2025 EPS near 5.38.
• Q4 FY2025 consensus: Total revenue ~$17.4B (+~24% YoY); semi revenue ~$10.7B (+~30%); AI semi revenue ~$6.2B (+~66%); infrastructure software ~ $6.7B (+~15%); adjusted EBITDA margin ~67% guided.
• Some analysts expect ~39% profit growth in 2025 and 2026. Management has hinted AI could grow faster than prior 50-60% YoY guide, which raises both the upside and the risk if growth normalizes.

VMware pivot: pricing, packaging, and partners

VMware is now ~40-43% of revenue, carrying higher margins and recurring mix. VCF 9.0 is pitched as a full-stack private-cloud platform for regulated industries and on-prem AI.

• Portfolio simplification (Dec 1): The focus narrows to vSphere Standard and VMware Cloud Foundation (VCF). VCF bundles vSphere, vCenter, NSX, vSAN, and key management into one platform. Subscriptions sell per CPU core, with a 72-core minimum and a 512-core cap on vSphere Standard-pushing larger footprints to VCF.
• Partner program refresh (Dec 3): The expanded Advantage Partner Program ties rewards to VCF adoption, certifications, and services depth. Higher discounts favor partners leading full lifecycle work, not just license transactions.
• Pushback and scrutiny: European trade press cites steep price jumps in some scenarios, reseller friction, and regulatory interest. This improves mix but adds churn and regulatory risk.

How Wall Street is positioned

• Ratings: Strong Buy skew across aggregators; dozens of Buys, very few Holds, no Sells reported in recent tallies.
• Targets: Average 12-month targets roughly cluster near the current price, with big banks in the ~$443-$472 zone on custom AI chips and networking strength; BofA sits at $460.
• Consensus: Broadcom is a core AI infrastructure name with strong earnings momentum, but upside looks tighter unless growth or margins beat high expectations.

Quant and technical signals

• Model snapshots: Short-term signals sit near neutral with a mix of bullish/bearish indicators. Some models see +1-8% near-term upside, but a one-year forecast slightly below current levels suggests mean reversion risk.
• Chart read: Shares broke out to ~$403 and eased back toward prior levels. Price sits above rising longer-term moving averages-an uptrend with the usual pre-earnings chop.

Flows: institutions and insiders

• Large allocators continue to hold or add, while others trim after the rally-healthy churn, not capitulation.
• Insiders sold 600k+ shares over the last three months (>$200M) with minimal buying; insiders still own ~2%.
• Institutional ownership near 76-80% speaks to high-conviction professional interest.

Key risks to keep on your screen

• Valuation and execution: With a high multiple, any miss on AI growth, hyperscaler capex, or VMware profitability can reset the stock quickly.
• Customer concentration: Heavy exposure to a few hyperscalers and AI labs (Google, OpenAI, and peers). Any shift to insourcing or supplier diversification would bite.
• Competition: Nvidia, AMD, Marvell, and others are pressing hard in AI compute and networking.
• VMware backlash and regulation: Pricing and partner changes may cause churn and draw scrutiny, particularly in Europe.
• Cycle risk: Some strategists warn of a 2026 "air pocket" in AI spend; high-multiple names are most exposed.

What to watch next (through December 11)

• AI revenue growth vs. ~66% consensus for Q4.
• Updates on AI backlog/TAM and any specifics on Google and OpenAI programs.
• Recovery in non-AI semi segments to offset any future AI normalization.
• VCF 9.0 traction and enterprise deals vs. ongoing pricing pushback.
• Any 2026 color that supports, or challenges, the current multiple.

Bottom line

Broadcom is central to AI infrastructure-custom accelerators, advanced networking, and a software engine in VMware. The setup is strong, the bar is higher, and the next real test lands on December 11. If execution meets the moment, the story extends; if not, a premium multiple leaves little slack.

Note: This article is for information only and is not financial advice, an investment recommendation, or an offer to buy or sell any security. Markets move quickly. Do your own research and consider speaking with a qualified adviser.

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