Broadcom stock (NASDAQ: AVGO) rose about 3% in Wednesday’s session, but the bigger debate isn’t about today’s bounce; it’s about whether AVGO is setting up for a larger re-pricing into its March 4 earnings report.
The move comes with a lot of investors still nursing losses, with AVGO roughly 20% below its December peak and trading like a stock waiting for permission to break one way or the other.
In the background, the broader tape has been sensitive to policy surprises, including shifting tariff headlines.
Broadcom stock: $73 billion AI backlog bulls cite
The core bullish argument is that this isn’t an “AI story” built on vibes and there’s a backlog number attached to it.
Analysts focusing on Broadcom’s AI exposure point to a reported $73 billion AI backlog deliverable over roughly 18 months.
On the most recent run-rate, the AI semiconductor line has been the headline engine.
In Q4 FY2025, Broadcom’s AI semiconductor revenue was cited at $6.5 billion, up 74% year over year, with full-year AI revenue at $20 billion, up 65%.
The broader company picture, in this framing, also remained strong: FY2025 revenue around $64 billion and free cash flow of $26.9 billion.
Management commentary has also been a key pillar of the bull case.
CEO Hock Tan has been described as confirming a fifth hyperscale “XPU” customer with an initial $1 billion order, while Anthropic was described as adding an $11 billion order on top of an existing $10 billion.
Bulls say those customer signals matter because they imply the AI business is not concentrated in one or two buyers.
The near-term focal point is guidance.
Broadcom has been described as guiding Q1 AI semiconductor revenue at $8.2 billion, nearly double year over year, and noting the AI switch backlog alone exceeds $10 billion.
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If the backlog is so large, why is the stock still down so much? Bears point to margins.
A key worry has been a CFO caution that gross margin could decline by roughly 100 basis points in Q1, partly due to mix: more AI revenue, but thinner margins than legacy chip segments.
That’s the trade-off investors are trying to price: huge growth, but potentially less profitability per dollar of sales.
That’s also why March 4 matters more than today’s 3% pop.
A beat without margin reassurance can still trigger profit-taking. But a beat with management confidence on margins could change the narrative quickly.
Wall Street positioning remains notably supportive.
The stock is followed by about 52 analysts with no Sell ratings, and the average 12‑month target is about $452, implying roughly 37% upside from current levels.
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