There's a scene in The Big Short where Mark Baum looks at the numbers, sees everything is inflated, and yet the market keeps climbing. Everybody's happy. Everybody's buying champagne.
Well. Broadcom reports first fiscal quarter results today after the market closes. And the vibe is exactly that: good numbers on the table, but a gnawing anxiety hanging in the air like a bad omen.
The Numbers Wall Street Expects
Let's translate the financial jargon into human language:
- Adjusted earnings per share: $2.03
- Expected revenue: $19.18 billion
- Year-over-year growth: nearly 29%
Damn, 29% growth for a company this size is no joke. This is a heavy-duty machine flooring it on the highway, not some garage startup burning through venture capital money.
Broadcom rode the artificial intelligence wave like few others. In 2025, the company's AI revenue jumped 65%. It's a key player in developing Google's TPUs (Tensor Processing Units) — the chips that make Google's AI magic work. CEO Hock Tan, the guy who looks like he's seen it all, pounded his chest in December and said first-quarter AI revenue would double to $8.2 billion.
Double. Not grow 10%. Not grow 20%. Double.
So Why Is the Stock Getting Hammered?
Here's where the paradox that the financial market loves to create to keep retail investors up at night lives.
Broadcom shares have dropped 9% in 2026 so far. The S&P 500? Flat. Dead even. Zero-zero.
In other words: while the index sits there sipping its morning coffee, Broadcom — growing 29%, doubling AI revenue — is getting its face kicked in.
Evercore analysts, who have a buy rating on the stock, said in a note on Monday something that sums up the sentiment perfectly: "In our view, the stock is likely being weighed down by investor concerns that 2026 marks peak capex in AI equipment."
Read that again? Peak.
The market isn't looking in the rearview mirror. It's looking at what comes after the party. And the question nobody wants to answer is: what if all this trillion-dollar spending on AI infrastructure slows down? What if Google, Meta, Microsoft, and the rest decide they've spent enough?
It's Taleb's logic in reverse: the market is pricing in tail risk before the tail actually whips. Sometimes rightly so. Sometimes out of pure herd panic.
The VMware Elephant in the Room
There's another point barely anyone is talking about. Broadcom bought VMware in 2023 — that server virtualization software giant. And software stocks as a whole have been under pressure for weeks because investors are asking themselves: is generative AI going to eat these companies' lunch?
Wall Street expects $12.25 billion from semiconductors and $7.02 billion from infrastructure software. That second number is basically the thermometer for the VMware investment. If it comes in weak, the market will go straight for the jugular.
During the quarter, Broadcom also launched new Wi-Fi 8 chips. Cool, but nobody in the market gives a damn about that right now. It's like showing off your new car in the middle of a house fire.
What Comes Next
For the second fiscal quarter, analysts expect $2.17 in adjusted earnings per share and revenue of $20.56 billion. In other words, the expectation is continued acceleration.
The conference call starts at 5 PM ET. Hock Tan will have to do what he always does: sell the future with enough conviction to calm the nervous nellies.
Dan Niles, of Niles Investment, said on CNBC that if he were buying tech, he'd pick Broadcom and Nvidia first. Fine. But Dan Niles has skin in the game. Do you?
Because here's the real question: are you buying Broadcom because you understand the business, or because some guy on Twitter told you AI is the future?
If it's the second one, maybe you're the product, not the investor.
The numbers drop in a few hours. And as the Joker would say: "And here... we... go."
