Broadcom's VMware Overhaul Draws Brussels Scrutiny as AI Chip Targets Balloon
Published on 09/17/2026 at 13:31 | Editorial boerse-global.de
Broadcom finds itself pulled in two directions at once. On one side, the chipmaker is pressing ahead with an aggressive artificial intelligence silicon strategy alongside partners including Anthropic, Google and Apple. On the other, European antitrust officials are sharpening their examination of how the company licenses VMware — the software business it acquired for $61 billion.
Shares changed hands at EUR 300.45 on Thursday, up 1.5% intraday, yet still well below the 50-day moving average of EUR 329.39. The stock has shed 8.5% over the past 30 days and sits roughly 30% beneath its 52-week high of EUR 429.60, reached in early June. A Relative Strength Index reading of 38.4 points to oversold conditions, which could invite short-term countermoves.
Brussels Zeroes In on Licensing Terms
EU competition authorities have sent questionnaires dated July to cloud providers, seeking details on Broadcom's VMware licensing practices, according to media reports. The regulator is bracing for a key deadline in the ongoing proceeding tied to the $61 billion VMware takeover.
At the heart of the matter is the allegation that customers are disadvantaged by the new licensing structure. Back in April, the General Court of the European Union rejected Broadcom's request to suspend the Commission's information-gathering in the case. The dispute has been simmering for months with no resolution in sight.
For investors, the upshot is regulatory uncertainty hanging over a software division that generated $8.8 billion in the third quarter of fiscal 2026 — a 29% revenue increase. Should Brussels impose conditions, pricing in the VMware business could shift, a factor that helped shape market sentiment last week.
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New Architecture Targets AI Cost Pressures
Even as the regulatory front heats up, Broadcom is pushing its technology roadmap forward. At VMware Explore 2026 in early September, the company unveiled VMware Private AI Cloud, built on VMware Cloud Foundation 9 and its in-house VMware AI Factory.
The architecture aims to tackle the cost drivers of AI workloads through NVMe storage tiering, storage deduplication and support for heterogeneous combinations of GPUs, CPUs and accelerators. On the security side, the offering aligns with the NIST CSF 2.0 framework and adds a new tool called AgentMinder for governing autonomous AI agents.
The product push fits a broader effort to position VMware not merely as a software segment but as a bridge to the expanding AI infrastructure business. That same business, however, sits at the center of the EU probe — a tension Broadcom will need to resolve in the months ahead.
Piper Sandler Reinstates Coverage With $460 Target
Analyst sentiment, meanwhile, remains constructive. Piper Sandler resumed coverage of Broadcom on September 10 with a buy rating and a $460 price target, a vote of confidence that lands as the stock has slipped 5.7% since the company raised its AI revenue forecast just over a week earlier.
That pullback looks contradictory against the fundamental backdrop. Alongside its latest quarterly results, Broadcom lifted its AI chip revenue projection for fiscal 2027 from roughly $100 billion to about $115 billion, and flagged approximately $230 billion for fiscal 2028. Such growth leaps are rare in the semiconductor industry and had initially stoked expectations further.
Strong Results Meet Profit-Taking
In the third fiscal quarter ended August 2, Broadcom posted revenue of $29.6 billion — an 86% jump year over year. Adjusted operating profit came in at $20.1 billion, with adjusted earnings per share of $3.32. Those figures demonstrate that the company has so far scaled its growth profitably.
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Even so, the recent price action shows many investors are taking profits after the record rally. In premarket trading Thursday, the stock stood at EUR 298.95, up 1.0%, following a close of EUR 296.00 on Wednesday. Over 30 days, the decline amounts to 8.9%, underscoring how much pressure the shares have absorbed.
Dividend Remains a Steady Component
Beyond the growth numbers, Broadcom reaffirmed its payout policy: the board approved a quarterly dividend of $0.65 per share. It will be paid on September 30 to shareholders of record as of 5:00 p.m. Eastern Time on September 21. For investors focused on recurring income, Broadcom remains a dependable holding even during periods of price weakness.
The combination of a raised revenue outlook, solid quarterly results and Piper Sandler's freshly reiterated buy rating with a $460 target paints a picture in which operating momentum contrasts with the near-term share decline. The question for investors is less whether Broadcom's growth remains intact, and more whether the recent setback represents an entry point or the start of a longer consolidation following the powerful rally. How quickly Brussels reaches an assessment — and whether any conditions weigh on the high-margin software business — will shape the stock alongside progress in AI chips.
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