Broadcom’s AI Order Book Reaches $73 Billion, With Shipments Spanning 18 Months
Key Facts
Broadcom shares fell 4.7% in Frankfurt on December 12, 2025, after the company reported results the previous day, as investors focused on the impact of growing AI revenue on profitability. The company said it had an AI order book worth $73 billion, which it expects to ship over 18 months. But Chief Executive Hock Tan warned against treating the order book as revenue that would be fully realized during that period. Reuters reported that the share move in Frankfurt was in line with its U.S. after-hours trading. The decline came despite a forecast for next-quarter revenue above the average analyst estimate.
The $73 billion order book reflects existing orders and an expected shipment schedule; it does not mean the entire amount will be recognized as revenue immediately or be guaranteed within 18 months. Tan said bookings were accelerating, describing the figure as dynamic as he forecast they would continue to grow. This distinction between orders, shipments and realized revenue is central to interpreting the figures, since converting orders into sales depends on shipments being delivered according to the expected schedule. The company provided a near-term forecast for AI semiconductor revenue, giving investors a way to gauge part of this shift in the next quarter. Sources did not say Tan refrained from providing any guidance for 2026.
Broadcom's revenue in the fourth quarter of fiscal 2025 was about $18.015 billion, up 28% from the same period a year earlier. AI semiconductor revenue rose 74% year over year, and the company said it was the main driver of quarterly revenue growth. The results were for a fiscal year that ended on November 2, 2025, and were announced on December 11. The figures show AI's growing contribution to the company alongside expansion in its overall business. Broadcom also announced a 10% increase in its quarterly cash dividend from the previous quarter, to $0.65 per share.
Broadcom estimated first-quarter fiscal 2026 revenue at about $19.1 billion, compared with the $18.27 billion average forecast from LSEG analysts. Reuters said the outlook exceeded Wall Street estimates, but coincided with a warning that margins would decline as AI revenue made up a larger share. Chief Financial Officer Kirsten Spears forecast that the consolidated gross margin would fall about 100 basis points from the previous quarter, attributing the decline mainly to a change in revenue mix. The company thus faced the challenge of rapid sales growth alongside pressure on its gross-profit margin. It estimated adjusted earnings before interest, taxes, depreciation and amortization at 68% of revenue in the fourth quarter, versus 67% expected in the first quarter.
For the first quarter, Broadcom forecast total revenue of about $19.1 billion, up 28% from the same period a year earlier. It also expected AI semiconductor revenue to double to $8.2 billion, driven by custom accelerators and AI Ethernet switches. The forecast follows year-over-year growth of 74% in AI-related semiconductor revenue in the fourth quarter. However, the rising share of this business in the mix is the same factor the company linked to a lower gross margin. The quarterly outlook therefore puts the paths of revenue and profitability at the center of attention for the next reporting period.
Tan said Broadcom did not expect significant returns from its contract with OpenAI in 2026, with most of the returns expected in 2027, 2028 and 2029. That timeline places part of the contract's value beyond the near-term forecast horizon, even as the company expects to ship its current order book over 18 months. The margin warning also shows that growth in AI revenue does not necessarily translate into overall profitability at the same rate. After falling 4.7% in Frankfurt, the stock declined 11.4% in Friday's session on December 12, according to the Associated Press. The stock had entered the session up 75.3% since the start of the year, and the agency linked the decline to investor concerns about the profitability outlook.