Broadcom shares in focus on Microsoft deal buzz ahead of Q4 results

With the bush abuzz with talk of a major AI chip deal coming Broadcom’s way, the company finds itself in investors’ crosshairs. According to a report by The Information, Microsoft is in talks to shift its custom development from Marvell Technology to the Palo Alto, California-based chipmaker.

Should the deal materialise, it would mark a big win for Broadcom’s ASIC (application-specific integrated circuit) division, strengthening its standing in the AI-hardware market.

Getting Microsoft on board as a customer would reduce the firm’s reliance on a single big client. Currently, it develops tensor processing units (TPUs) for Google. A second “hyperscaler” anchored to Broadcom could meaningfully diversify its order book.


Earnings on the horizon

Broadcom will report its Q4 fiscal 2025 results on December 11. The street projected a quarterly revenue of around $17.5 billion, supported by robust demand in AI networking and custom-chip segments. Its earnings per share (EPS) projections are also high — roughly $1.87, marking an estimated year-on-year increase of over 30%.

Beyond the headline numbers, investor focus will be on whether the management reaffirms its earlier target of more than $12 billion in AI-related annual revenue. In addition, investors will watch the momentum in its software division (e.g., subscription migration at its infrastructure-software arm) as a barometer of business diversification beyond hardware.

Bullish analysts

Analysts have reacted strongly to a prospective Microsoft deal and robust earnings forecasts. In recent weeks, major institutions have raised their price targets for Broadcom.

Morgan Stanley analysts believe that Broadcom’s AI-related revenues in certain segments could even surpass those of market leader Nvidia by 2026. Analysts at Susquehanna International Group cited other deals — including a 10 gigawatt (GW) agreement with OpenAI — adding further upside.