Key Takeaways
- Broadcom’s fiscal Q1 earnings release is scheduled for Wednesday, March 4, after the closing bell
- Wall Street consensus calls for earnings per share of $2.03 with revenue hitting $19.26 billion, compared to $1.60 EPS and $14.92 billion revenue in the year-ago period
- HSBC has dramatically increased AI networking projections — forecasting $17B in fiscal 2026 and $30B in fiscal 2027
- Despite maintaining a Buy rating, HSBC reduced its price target from $535 down to $450 due to an industry-wide AI valuation adjustment
- Market participants remain wary following Nvidia’s 5.5% decline despite delivering better-than-expected results
As Broadcom prepares to unveil its fiscal first-quarter performance this Wednesday, Wall Street anticipates impressive numbers, though investor enthusiasm appears tempered by recent market dynamics.
Market forecasts point to adjusted earnings reaching $2.03 per share alongside revenue of $19.26 billion. These projections represent substantial advancement from the year-earlier quarter’s $1.60 per share and $14.92 billion — indicating robust annual expansion across the board.
The semiconductor solutions division is anticipated to lead performance metrics, with revenue projections hitting $12.4 billion — representing a substantial 51% surge compared to last year’s corresponding period. The infrastructure software segment is projected to contribute $6.99 billion, marking approximately 4.3% growth.
Broadcom’s artificial intelligence networking operations have emerged as a critical expansion engine. With a previously announced $20 billion AI networking backlog, HSBC analyst Frank Lee suggests current figures may actually underrepresent future momentum.
Lee has updated his fiscal 2026 and 2027 AI networking revenue projections to $17 billion and $30 billion respectively — figures that exceed Street consensus by 43% and 64%. This substantial differential highlights a significant disconnect between HSBC’s outlook and broader analyst expectations.
Yet despite this bullish revenue outlook, HSBC trimmed its price objective from $535 to $450. The adjustment reflects a comprehensive “valuation reset” impacting AI-focused enterprises across the sector. While Lee maintained his Buy recommendation, the reduced target underscores shifting market sentiment toward technology valuations.
Tech Giants Continue Infrastructure Investment
Analyst confidence persists partly because major technology companies continue aggressive spending patterns. Melius Research analyst Ben Reitzes highlighted that Meta and Alphabet have each boosted their 2026 capital expenditure plans by roughly 30%. Such substantial infrastructure commitments directly benefit companies positioned like Broadcom.
“The rationale for spending remains strong,” Reitzes noted, emphasizing that OpenAI and Anthropic have similarly increased revenue projections as corporate adoption accelerates.
He maintains a Buy rating on AVGO with a $530 price objective, characterizing the upcoming report as “another outstanding quarter” driven by expanding order backlogs.
Market Volatility Following Nvidia Results
However, not all market observers approach the earnings release with confidence. Nvidia delivered fourth-quarter results on February 25 that surpassed analyst estimates while providing above-consensus guidance. Despite this performance, shares declined 5.5% the following trading session.
Broadcom experienced a sympathetic 3.2% pullback on February 26. This market behavior — where positive results still trigger selling pressure — has heightened trader vigilance ahead of Broadcom’s announcement.
Paul Meeks from Freedom Capital Markets expressed the prevailing concern: “I’m a bit anxious about the reaction to AVGO’s quarterly report and guidance on March 4, particularly given the reactions last week to the announcements from other AI bellwethers.”
Valuation metrics compound these concerns. Broadcom currently commands a forward price-to-earnings multiple of 26.9x, exceeding both Nvidia’s 21.3x and AMD’s 25.7x valuations.
UBS analyst Timothy Arcuri observed that recent weakness in software sector valuations has contributed to Broadcom’s relative underperformance year-to-date. While shares have climbed 64% over the trailing twelve months, they’ve declined 9% in 2026.
According to HSBC’s Lee, the next significant catalyst following earnings would likely involve positive developments regarding AI networking expansion, considering Broadcom’s accelerating portfolio growth in this strategic area.
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