Broadcom's Margins Expected to Narrow Due to AI Revenue -- Market Talk
Dow Jones12-13 00:47
1147 ET - Broadcom is expecting AI to squeeze its gross profit margins in 2026, Truist analyst William Stein says. New orders for AI server racks come with significantly lower margins than is typical for the chipmaker, Stein says. Based on Broadcom's comments Thursday, Stein now estimates total gross profit margins will be around 74% in 2026, down from 78.6% in 2025 and below the 77.1% Stein was previously projecting. "We think the higher EPS overwhelms the GPM impact, but we recognize this metric is critical for many semi investors," he says. Shares fall 11%. (katherine.hamilton@wsj.com)
(END) Dow Jones Newswires
December 12, 2025 11:47 ET (16:47 GMT)
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