New York, January 25, 2026, 16:25 EST — Market closed
- On Friday, Broadcom shares ended down 1.7%, closing at $320.05.
- Fidelity announced it has settled a lawsuit concerning access to VMware software, which is owned by Broadcom.
- Investors are turning to Wednesday for the Fed’s decision and a busy lineup of megacap tech earnings.
Broadcom (AVGO.O) ended Friday at $320.05, slipping 1.7%. This marks the fourth straight session of losses, leaving the stock roughly 23% off its 52-week peak. (Broadcom)
U.S. markets are closed on Sunday, but traders are gearing up for a busy week. The Federal Reserve is widely expected to keep rates on hold Wednesday. Around 20% of the S&P 500 will report earnings, with heavyweights like Apple, Microsoft, Meta Platforms, and Tesla among them. “It’s been a little bit of a short but steep roller-coaster ride,” said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group. “Earnings are the driver,” added Chris Galipeau, senior market strategist at Franklin Templeton. (Reuters)
Fidelity Investments announced Friday it reached a settlement in a lawsuit accusing Broadcom of threatening to cut off access to VMware’s “virtualization” software—tools that allow companies to run multiple virtual servers on a single physical machine—and sought to dismiss the case. A Fidelity spokesperson confirmed Broadcom’s services would continue “uninterrupted,” though Broadcom did not immediately respond to requests for comment. The dispute arose after Broadcom’s 2023 acquisition of VMware and a product revamp that nudged customers toward more expensive bundles. (Reuters)
Broadcom slid as Wall Street finished mixed on Friday. The Dow dropped 0.58%, while the S&P 500 inched up 0.03%, and the Nasdaq rose 0.28%. Intel tumbled 14% after flagging supply constraints that are limiting its ability to keep pace with AI-driven demand for data-center chips, dragging down risk appetite late in the week. (Reuters)
Chip stocks showed mixed results. Nvidia gained roughly 1.5%, but Qualcomm dropped around 1.3%, pushing Broadcom into the group’s lagging ranks. (MarketWatch)
Broadcom is right at the heart of the AI boom, offering networking chips and custom processors for data centers. It also relies on VMware to expand its reach in enterprise software. This blend can be a double-edged sword: the stock often reacts sharply to cloud spending chatter and any hints that corporate IT budgets might be scaling back.
There’s a catch. Broadcom warned that a rising share of AI revenue could weigh on margins. CFO Kirsten Spears noted on the December earnings call that first-quarter gross margin would likely drop by “approximately 100 basis points” sequentially because of this. The company also revealed a $73 billion backlog set to ship over the next 18 months, though analysts flagged risks tied to customer concentration. (Reuters)
Fidelity’s lawsuit, though settled now, highlights how VMware contract renewals and pricing shifts can get complicated. If big clients start holding off on renewals, pushing for better deals, or moving workloads elsewhere, it could quickly alter the outlook for Broadcom’s software growth.
The next major event is set for Wednesday, January 28, when the Fed announces its policy decision. Investors will then turn to megacap tech earnings for clues about AI spending trends. Broadcom shares start trading again on Monday.
