ETFs to Buy as Broadcom Trips 11% Despite Beating Q4 Earnings & Revenues

Broadcom Inc.’s AVGO shares fell 11.4% at the bourses during the last trading session, following the company’s fourth-quarter fiscal 2025 results. Surprisingly, in spite of beating analysts’ expectations on both counts, the chipmaker failed to impress its investors, as evident from the significant sell-off in its shares. 

The pullback in AVGO’s shares was most likely caused by investor concerns over the profitability of its AI business, which, despite posting solid revenue growth in the fiscal fourth quarter, is expected to see a 100-basis-point sequential decline in gross margin in the first quarter of fiscal 2026, as noted by management on the earnings call.
Moreover, the company’s total AI backlog as of fiscal 2025-end, despite exceeding a solid $73 billion, did not come in line with some analysts’ estimates. Both these factors further hurt investors’ sentiment, who already had been edgy lately in terms of AI’s overvaluation and the resultant fear of an AI bubble burst, thus leading to AVGO’s decline post earnings release. 

While this share price slump might come as disappointing news for some investors at the moment, those who are prudent may recognize this as an opportune moment to invest in AVGO shares, considering its solid long-term growth potential. Being a prominent chipmaker, the company remains a significant AI integrator.  

Notably, in October 2025, ChatGPT developer OpenAI signed a multi-year contract with Broadcom to deploy 10 gigawatts of custom AI accelerators. Meanwhile, Broadcom revealed Anthropic as its fourth customer during its fourth-quarter earnings release. Anthropic has placed an additional $11 billion worth of orders for AVGO’s TPU Ironwood racks, with delivery scheduled for late 2026. Looking ahead, the company expects its AI semiconductor revenues to double year over year to $8.2 billion in the fiscal first quarter, driven by custom AI accelerators and Ethernet AI switches.

However, direct investment in AVGO stock carries unique risks. These include a high customer concentration risk from its custom AI chip business, with a large portion of revenues coming from a handful of hyperscale clients, which creates high revenue volatility if any major customer shifts to in-house chip development or slows orders.

Therefore, for investors looking to capitalize on this recent dip without being fully exposed to the unique single-stock volatility and company-specific challenges that could severely impact AVGO, a more prudent strategy would be to invest in Exchange-Traded Funds (ETFs) with significant exposure to this chipmaker. This approach will allow investors to capture AMD's potential upside while mitigating company-specific risks that might arise from its specialized sector challenges or geopolitical factors.

But before diving straight into these ETFs, let us review AVGO’s overall performance in the fiscal fourth quarter across other metrics.

A Brief Analysis of AVGO’s Q4 Results

Broadcom’s fourth-quarter fiscal 2025 adjusted earnings of $1.95 per share surpassed the Zacks Consensus Estimate by 4.3% and surged 37.3% year over year. Its revenues rallied 28.2% year over year to $18.02 billion and beat the Zacks Consensus Estimate by 2.9%. The company registered organic revenue growth of 24% year over year. 

Segment-wise, revenues from its Semiconductor solutions unit went up 35% year over year, while the infrastructure software segment’s top line surged 19%. 

The company ended the fiscal fourth quarter with cash and cash equivalents worth $16.18 billion, while its long-term debt was $61.98 billion as of Nov. 2, 2025. 

During fiscal 2025, AVGO returned $17.5 billion of cash to its shareholders in the form of $11.1 billion in dividends and $6.4 billion in share repurchases.

Market Reaction

The initial pullback in Broadcom’s share price after its fiscal fourth-quarter earnings release appears to have rebounded, lifting AVGO 0.5% in pre-market trading on Dec. 15, 2025 (as observed at the time of writing this article).

Following the earnings release, a Bank of America analyst Vivek Arya and his team updated their opinions on AVGO stock. The team raised its estimates for Broadcom’s pro forma earnings per share for fiscal years 2026–2027 by 8% each (as per The Street, cited in a Yahoo Finance Report).

Broadcom-Heavy ETFs to Buy

iShares Semiconductor ETF SOXX

This fund offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors. Of these, AVGO holds the second spot, with a 7.78% share of the fund.

SOXX has surged 39.8% in the year-to-date period. The fund charges 34 basis points (bps) as fees and sports a Zacks ETF Rank #1 (Strong Buy).

VanEck Semiconductor ETF SMH

This fund provides exposure to 26 companies involved in semiconductor production and equipment. Of these, AVGO holds the third spot, with an 8.87% share of the fund.

SMH has surged 46.2% in the year-to-date period. The fund charges 35 bps as fees and sports a Zacks ETF Rank #1.

Fidelity MSCI Information Technology Index ETF FTEC

This fund provides exposure to 292 U.S. information technology companies. Of these, AVGO holds the fourth spot, with a 5.20% share of the fund.

FTEC has soared 22% in the year-to-date period. The fund charges 8 bps as fees and sports a Zacks ETF Rank 1.

iShares U.S. Technology ETF IYW

This fund offers exposure to 140 U.S. companies from the electronics, computer software and hardware, and information technology industries. Of these, AVGO holds the fourth spot, with a 3.47% share of the fund.

IYW has surged 24.7% in the year-to-date period. The fund charges 38 bps as fees and sports a Zacks ETF Rank #1. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research