Broadcom’s 180% Rally Faces AI-Earnings Test

• Broadcom stock has risen more than 180% since April 2025, driven by AI growth optimism.
• Revenue is expected to hit $17.5 billion, with $6.2 billion coming from AI, though valuation concerns loom.

Broadcom stock has climbed over 180% since April 2025 as investor enthusiasm over the company’s artificial intelligence prospects intensifies. This sharp rise coincides with anticipation for Broadcom's fiscal fourth-quarter earnings report, with its AI division forecast to generate $6.2 billion in revenue—a 68% year-over-year spike—according to Cryptopolitan on December 11, 2025.

Analysts estimate Broadcom will post adjusted earnings of $1.87 per share on total revenue of $17.5 billion. Investors are keenly awaiting insights from CEO Hock Tan on how the company plans to sustain its AI-driven momentum while broadening its customer base. With the stock currently priced at 42 times forward earnings—well above its 10-year average of 17—questions arise about the alignment of its valuation with anticipated growth.

Despite these optimistic forecasts, caution is surfacing among analysts and investors. Peter Sorrentino of Huntington National Bank expressed concerns over potential earnings disappointment, noting that his firm chose not to increase its Broadcom position amid the recent rally. Similarly, Ryuta Makino of Gabelli Funds flagged the high valuation as a potential catalyst for profit-taking, even if earnings meet expectations.

Customer diversification is seen by some analysts as key to addressing these valuation worries. Broadcom’s stock saw a significant boost last quarter after Tan announced securing a new customer with over $10 billion in orders. A comparable disclosure in the upcoming earnings call could ease concerns about over-reliance on the AI segment while reinforcing confidence in other business areas like enterprise storage, broadband, and wireless connectivity.

As Broadcom prepares to release its highly-anticipated earnings report, the outcomes—particularly for its AI segment—will be pivotal in shaping the stock’s trajectory, given its steep valuation and the high expectations it currently faces. Investor sentiment may hinge on the company’s ability to not only meet these expectations but also reassure markets about the sustainability of growth outside its AI portfolio.