Broadcom’s Two-Speed Engine: AI Chips Surge as VMware’s European Headwinds Gather
Published on 07/23/2026 at 07:11 | Redaktion boerse-global.de
Broadcom’s stock is climbing again, but the narrative driving the rally is far from simple. The chipmaker’s shares added 2.9% on Wednesday to close at €348.65, extending a weekly gain of 6.4% and pushing the year-to-date advance to 17.1%. Yet beneath the surface of that steady ascent, two very different stories are playing out — one powered by the relentless demand for artificial-intelligence infrastructure, the other tangled in a growing regulatory storm over the company’s VMware acquisition.
The engine room of Broadcom’s recent performance is unmistakably the data centre. Custom AI accelerators built for hyperscalers such as Google and Meta, alongside networking chips that stitch together thousands of GPUs, have become the backbone of revenue growth. That hardware momentum is now being reinforced by a software story that is gaining heft by the quarter. Broadcom’s infrastructure-software division, which includes the VMware assets acquired in 2023, contributed $7.2 billion to total revenue in the most recent period. Management expects that figure to jump to roughly $8.9 billion in the current quarter — a sign that the integration of VMware’s recurring-licence model is beginning to smooth out the cyclicality that has long dogged the semiconductor business.
The numbers bear that out. Group revenue for the second fiscal quarter of 2026 hit $22.19 billion, a year-on-year increase of nearly 48%. Analysts at Morgan Stanley have singled out Broadcom as a preferred play on AI infrastructure, citing strong cash generation and a pipeline of well-defined custom-chip projects that offer visibility rare in the chip sector. UBS, meanwhile, believes the recent correction in AI-related equities is largely behind the market, noting that forced selling by hedge funds has abated and that conditions are ripe for rebuilding positions in quality names.
Should investors sell immediately? Or is it worth buying Broadcom?
But while the AI narrative is firing on all cylinders, a very different drama is unfolding in Brussels. A coalition of five European industry associations — including Germany’s VOICE and Belgium’s Beltug — has called on the European Commission to take enforcement action against Broadcom’s licensing practices for VMware. The groups argue that customers have faced sharp price increases and a loss of flexibility since the takeover, and are demanding a three-year transition period for affected businesses.
Broadcom has pushed back, suggesting that the complaints are being driven by large cloud rivals with their own competitive agendas. The company’s management has consistently defended the VMware integration as a value-creating move that has already lifted the share of recurring software revenue and reduced exposure to the volatile chip cycle.
For now, the market appears to be weighing these cross-currents with a degree of calm. The stock sits at €348.65, just above its 50-day moving average of €347.00 — a technical signal that the recent recovery has fundamental support rather than being a short-lived bounce. The broader uptrend remains intact, with the share price trading well above its 200-day average of €314.58, despite the volatility that has swept through the semiconductor space in recent weeks.
Still, the gap to the 52-week high of €429.60 is a reminder that the stock has not fully recaptured its former heights. The VMware regulatory overhang, combined with lingering sector jitters, means that Broadcom’s two-speed engine — AI hardware roaring ahead while software faces political turbulence — will need to keep both cylinders firing if the rally is to extend much further.
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