Next week, Broadcom's "Google Chain Core" financial report is coming.

Next week, Broadcom's "Google Chain Core" financial report is coming.

```

Author: Ye Huiwen

Source: Hard AI

On December 4, according to the latest research reports by Citi and Goldman Sachs, in the upcoming 2025 fiscal fourth quarter (F4Q25) earnings release after the market closes on December 11, Broadcom is expected to once again deliver a strong "beat and raise" performance, benefiting from Google opening TPU usage to external customers and robust overall AI spending growth.

Explosive AI revenue growth: Citi expects Broadcom's AI revenue in fiscal 2026 (F26) to surge 147% year-on-year to an astonishing $49.3 billion. Goldman Sachs expects growth to exceed 100%.

Core drivers at their peak: Google is expanding its TPU business to external customers. Combined with demand from OpenAI, Anthropic, and Meta, this has become the key engine driving heightened expectations.

Bubble or feast?: Citi bluntly says this feels like a "bubble" (OpenAI's capex will far exceed its revenue), but before the bubble bursts, semiconductor valuations still have upside as long as capital continues chasing AI.

Target price raised: Citi reiterates Buy rating with a $415 target price; Goldman Sachs raises its target price to $435.

Earnings Outlook: Wall Street Bets on "Beat Expectations" as New Normal

For the upcoming December 11 earnings report, institutional investors' expectations have been raised, with good reason.

Citi's report clearly states, Broadcom's F4Q25 revenue is projected to reach $17.5 billion (up 9% quarter-on-quarter), above consensus estimates.

This is mainly thanks to continued growth in AI sales. On the profit side, Citi expects EPS (excluding share-based compensation, SBC) to be $1.96, also above the consensus estimate of $1.87. Notably, Broadcom has beaten both market and Citi's own estimates for four consecutive quarters.

Guidance is even more critical. Citi expects Broadcom to give higher-than-expected F1Q26 revenue guidance, projecting $18 billion (market consensus is $18.4 billion; Citi is slightly conservative but still optimistic about upside from Google's scaling). Gross margin is estimated to remain high at 76.0%.

Google TPU External Supply Opens New Chapter, AI Revenue to See Triple-Digit Growth

As the core asset of the "Google chain," Broadcom’s fundamentals are undergoing a qualitative leap.

According to Citi's detailed breakdown, Broadcom’s AI sales in fiscal 2026 are expected to grow 147% year-on-year to about $49.3 billion, with AI revenue share jumping from 31% in fiscal 2025 to 53%.

The core growth driver comes from Google—Google is not only using TPUs extensively for its own business but is also extending TPU resources to external customers. Orders from Anthropic, Meta, and OpenAI are also key growth contributors.

Goldman Sachs' data supports this trend. Goldman expects Broadcom’s AI revenue to reach $45.4 billion in fiscal 2026 (up 128% year-on-year), increasing further to $77.3 billion in fiscal 2027. Goldman specifically points out that investors should watch for positive data points after Google Gemini 3's launch, as well as the large-scale adoption of Broadcom's Tomahawk 6 chips in network connectivity.

Before the Bubble Bursts: OpenAI's Trillion-Dollar Capex Frenzy

Citi's research includes a thought-provoking observation: "It feels like a bubble... but we don't know when it’ll burst."

Citi compares this to the late-1990s Internet bubble. Currently, OpenAI has announced a total compute capacity plan of 26 GW. According to Citi AI analysts’ calculations, each GW costs about $50 billion, meaning OpenAI alone may accumulate capex of up to $1.3 trillion by 2030.

This figure far exceeds revenue expectations. Even if OpenAI’s revenue grows 14 times to $163 billion by 2029, its expected annual capex will still reach $700 billion (by comparison, the combined capex of the four cloud giants is estimated at $600 billion).

Although Citi sees the "spending far outpacing revenue" model as exhibiting bubble traits, until enterprise demand for AI services slows or IPO financing dries up, semiconductor valuations still have room to grow. The current strategy is to stay long before the bubble pops.

Alongside surging AI business, Broadcom’s non-AI semiconductor business also has good news. This segment (26% of estimated F25 sales) stabilized around $4 billion after a roughly 39% correction from the January 2023 peak of $6.5 billion.

Citi points out that recovery in the non-AI business will help offset the gross margin dilution effect from the AI business (large-scale custom ASIC chips).

Valuation and Target Price: Just the Beginning

Based on extremely optimistic profitability projections for the next two years, both investment banks have issued upbeat target prices:

Citi: Reiterates "Buy" rating, $415 target price. This is based on 30x estimated fiscal 2027 EPS (excluding SBC). Citi’s EPS forecasts for F26 and F27 are about 10% above consensus.Goldman Sachs: Raises target price from $380 to $435. Goldman also raised F26 and F27 EPS estimates (average increase of 14%), and believes the market has yet to fully price in expectations for AI revenue doubling in fiscal 2026.

Next week's Broadcom earnings report is not just a summary of the past three months—it's also a weathervane for whether the 2026 AI capex feast will continue. As long as Google and OpenAI keep spending big, Broadcom is among the biggest "shovel sellers" in this gold rush.

Risk Warning and DisclaimerThe market has risks; investments must be made cautiously. This article does not constitute personal investment advice and does not take into account individual users’ specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Invest accordingly at your own risk. ```