New York, Jan 22, 2026, 16:32 (ET) — After-hours
- Broadcom shares slipped roughly 1% after hours, marking their second consecutive session of losses.
- The U.S. GSA announced that a OneGov agreement provides discounts up to 64% on certain VMware software, valid through May 2027.
- Investors are eyeing Broadcom’s upcoming earnings report, set for March 5.
Broadcom Inc. shares dropped roughly 1% in after-hours on Thursday, bucking the broader U.S. stock gains. Investors remain focused on the chipmaker’s software pricing strategy and its VMware business. The stock last traded down 1.0% at $325.49.
Why it matters now: Broadcom’s software unit is meant to smooth out earnings during chip downturns. But a major federal discount program throws up two signals on the trading floor — it could boost volumes, or it might signal pricing pressure creeping into certain areas of the stack.
The stock hits a market that’s swift to penalize any hint of margin pressure, particularly among “AI infrastructure” players where revenues remain solid but costs and product mix can shift rapidly.
Wall Street’s key indexes climbed Thursday, with the Nasdaq gaining 0.91% and the S&P 500 rising 0.53%, Reuters reported. Investors stepped in after tariff threats softened and economic data showed strength. Broadcom, however, lagged behind. 1
The U.S. General Services Administration announced Wednesday a OneGov agreement with Broadcom, offering federal agencies discounts up to 64% on a VMware product bundle. The package includes Tanzu Platform, Tanzu Data Intelligence, Avi Load Balancer, and vDefend. Broadcom CEO Hock Tan called the deal a sign of their “commitment to optimizing value” for federal customers. GSA Administrator Ed Forst highlighted the agency’s speed in securing cost-cutting deals. 2
OneGov represents GSA’s push to consolidate federal purchasing instead of juggling hundreds of individual contracts. The deal focuses strongly on tools designed for building and securing modern applications; “zero trust” security — where no user or device is trusted by default — crops up repeatedly throughout the package.
But here’s the snag for operators: the deal excludes VMware vSphere Foundation — the key hypervisor software that powers virtual machines in many VMware setups, The Register reported. 3
Broadcom sits at the intersection of semiconductors and enterprise software, with its stock reflecting bets on both sectors. Supporters highlight VMware’s subscription-driven, recurring revenue stream, while skeptics worry that heavy discounting could erode the quality of that revenue down the road.
The stock closed Wednesday down 1.14% at $328.80, underperforming a broader rally. It still sits roughly 21% below its 52-week peak reached in December, according to MarketWatch data. 4
Traders remain wary that software price shifts may not be “one-off” events. Broadcom’s recent earnings report highlighted another concern: growing sales of custom AI processors could pressure profit margins, since these chips usually come with lower returns compared to other products. 5
Broadcom’s next earnings report, expected March 5 according to Nasdaq, will be a key focus. Investors want clarity on VMware demand, the extent of discounting in bookings, and any shifts in margin forecasts. 6
