Broadcom holds above $350 into year-end as traders refocus on AI margins
Broadcom closed up 0.6% at $352.13 on Friday, holding the $350 handle in quiet, post-Christmas trade (December 28, 2025). The stock's muted move still matters: AVGO is a clean proxy for the "AI infrastructure" theme as data center spend drives chips and networking into 2026.
Into the year-end "Santa Claus" window, volumes are thin and moves can look bigger than the news. The broader tape finished slightly lower, while chip names were steadier.
Market backdrop
Friday saw the S&P 500 and Nasdaq drift modestly lower on light volume. Semis outperformed at the margin: the Philadelphia Semiconductor Index edged up 0.05%. Nvidia gained 1% after a licensing deal with Groq and hiring its CEO kept attention on AI hardware.
Seasonality is in play. Historically, the final five sessions of December and first two of January often skew positive - the so-called Santa Claus rally. For context, see an overview of the pattern here: Investopedia.
What the numbers say
- Q4 revenue: $18.0B, up 28% year over year.
- FQ1'26 revenue guide: about $19.1B.
- AI semiconductor revenue: "increasing 74% year-over-year," per CEO Hock Tan.
- Margins: management flagged roughly a 100 bps sequential gross margin decline as AI becomes a larger share of mix.
- Dividend: $0.65 per share, payable Dec. 31.
- Technical levels: closed below the 50-DMA (~$362) but well above the 200-DMA (~$287). Friday close: $352.13.
For live figures and historicals, see AVGO's page: Yahoo Finance.
Why margins matter now
The core debate is simple: can Broadcom keep compounding AI-driven sales while managing mix-related margin pressure. Custom accelerators and networking wins push top line, but the mix shift can clip gross margin until pricing, learning curves, and scale kick in.
That's why a modest pullback in margins drew outsized attention despite strong growth. Funds want to see evidence that AI revenue is profitable at scale - not just large.
Into year-end and the next catalysts
With liquidity light, holding $350 is a constructive tell into the Santa window. The broader market sits near records; any risk-on tone should help semis with high AI exposure.
Next milestones: fiscal Q1 ends Feb. 1, 2026, with the earnings update expected in early March (calendar lists March 4 after the close). Guidance around AI mix, pricing, and supply commitments will be the swing factors.
What pros are watching
- Data center capex run-rate into 2026 and how much AVGO captures across accelerators and networking.
- Gross margin path: scale benefits, pricing discipline, and product mix versus the ~100 bps sequential dip.
- Infrastructure Software steadiness as a cash-flow ballast during heavy hardware cycles.
- Free cash flow coverage of dividends and any buyback cadence.
- Valuation vs. high-growth semis: how much premium the market assigns to "AI + software" stability.
- Technical map: $350 support, 50-DMA (~$362) as first resistance; 200-DMA (~$287) as bigger downside line.
Trading frame to end the year
Base case: range trade between $350 and the 50-DMA while liquidity is thin. A clean break above the 50-DMA on volume invites momentum buyers; a decisive loss of $350 puts the low-$340s on watch.
For longer-horizon holders, the focus is execution: confirm AI revenue durability, defend margins, and keep software stable. If those boxes get checked in March, the stock can grow into its multiple.
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