TLDR
- Q1 FY2026 results scheduled for March 4 after trading ends
- Analyst estimates point to $19.1 billion revenue with 28% annual growth; adjusted EPS projected at $2.03
- Margin compression represents primary investor concern — AI product lines generate thinner margins compared to traditional segments
- Average analyst price target reaches $433, while post-December targets cluster around $458
- UBS maintains Buy recommendation at $475; DA Davidson opens coverage with Neutral stance
Broadcom plans to unveil Q1 FY2026 financial results on March 4 following the closing bell.
Recent months have proven challenging for the equity. Following the December 2025 quarterly announcement, AVGO declined from above $400 to approximately $340 within days, staged a temporary recovery toward $355, then slipped under $310 during early February. Current trading levels hover near $330.
This represents a decline exceeding 15% from the previous report — while most analysts maintain optimistic price projections.
Analyst forecasts call for Q1 revenue reaching $19.1 billion, aligning with company-provided guidance. This figure would represent 28% expansion compared to the prior year.
Adjusted EPS projections settle at $2.03, indicating approximately 26% growth. Broadcom typically refrains from providing adjusted EPS guidance outright, though the company historically offers conservative projections.
The chipmaker has either exceeded or matched revenue projections in 22 of the past 24 quarterly reports, while surpassing adjusted EPS expectations in 23 of those 24 quarters. This performance history speaks volumes.
Meeting or exceeding forecasts doesn’t automatically translate to stock appreciation. Market response will depend heavily on Q2 projections, margin discussion, and management commentary during the earnings call.
The Gross Margin Question
Margin performance represents the primary uncertainty surrounding this announcement.
During the previous quarter, Broadcom delivered a gross margin approaching 78% — ranking among the strongest figures for any major U.S. semiconductor company. Management indicated that Q1 gross margin would decline approximately 100 basis points sequentially, attributed to an increased proportion of AI-related revenue.
The dynamic is clear: AI semiconductor sales generate thinner gross margins relative to traditional product lines. As AI segments expand faster than legacy operations, the consolidated margin profile weakens.
Market participants will scrutinize whether gross margin lands near 77% or higher. Analysts will probably seek detailed explanations regarding potential margin trajectory throughout the remainder of FY2026.
Current Q2 FY2026 projections anticipate $20.35 billion in revenue — reflecting roughly 36% year-over-year expansion. Adjusted EBITDA margin expectations for Q2 stand at 68.5%, consistent with company guidance.
Where Analysts Stand
Despite recent stock weakness, Wall Street has maintained relatively steady price objectives.
Consensus price targets cluster around $433, suggesting approximately 30% appreciation potential from present levels. Price objectives established following the December announcement average near $458 — indicating roughly 38% upside potential.
Citigroup recently adjusted its target downward from $480 to $458, representing the sole reduction tracked by MarketBeat since the December quarterly report.
UBS confirmed its Buy recommendation with a $475 objective on February 24. The firm observed Broadcom’s semiconductor operations trading at 20x P/E, 23x EV/free cash flow, and 17x EV/EBITDA — each approximately one turn premium to Nvidia and comparable companies. UBS additionally highlighted possible VMware customer attrition risk in 2026 and 2027 as three-year contracts reach renewal periods.
DA Davidson launched coverage with a Neutral assessment, expressing concerns regarding Broadcom’s sustained competitive position in the AI ASIC marketplace.
Jefferies confirmed a Buy recommendation, emphasizing Broadcom’s strategic positioning across AI and networking sectors.
Regarding product developments, Broadcom recently introduced the BroadPeak chip, manufactured using 5nm CMOS technology and designed for advanced 5G and 6G network infrastructure. The company projects up to 40% power efficiency improvements versus current solutions.
A German court recently mandated Renault cease sales of its Megane and Clio vehicle models following a patent conflict with Broadcom concerning ethernet network cable connection technology.
