New York, Jan 24, 2026, 18:27 ET — Market closed.
- Broadcom shares finished down 1.7%, closing at $320.05.
- Fidelity announced it has resolved a lawsuit concerning access to VMware software, now owned by Broadcom.
- Traders are eyeing next week’s Fed moves and major tech earnings for signals on chip stock valuations.
Broadcom Inc. shares dropped 1.7% on Friday, closing at $320.05. The decline followed news that Fidelity Investments settled a lawsuit regarding access to VMware software, which Fidelity described as critical to its operations. The asset manager said Broadcom agreed to keep supplying services and software to its subsidiary, avoiding a court hearing scheduled for next week. “Broadcom’s services to Fidelity will continue uninterrupted,” a Fidelity spokesperson confirmed. (Reuters)
Why it matters now: the case highlights Broadcom’s VMware strategy just as new market-moving catalysts emerge. Broadcom has increasingly relied on infrastructure software to buffer chip cycle swings, though major clients remain wary of pricing shifts and contract details.
Semiconductors hit a rough patch just as this week’s earnings season kicks off. Intel’s sharp drop after a weak forecast dragged down sentiment heading into the weekend. Investors now brace for major tech reports that could reshape expectations around AI spending. Julian McManus, portfolio manager at Janus Henderson, described it as a “show-me” moment, where companies need to “put up the revenue growth” after the recent surge in stocks. (Reuters)
Fidelity’s lawsuit claims it has relied on VMware “virtualization” software since 2005—technology that allows multiple virtual servers to run on a single physical machine—and cautioned that losing access might cause outages and disrupt trading. The company also accused Broadcom of repackaging VMware products into pricier bundles, pressuring Fidelity to purchase a bundle when renewing its subscription. Broadcom did not immediately reply to a request for comment, Reuters reported.
Broadcom’s market cap stood near $1.5 trillion after Friday’s close, still trailing its 52-week peak of $414.61, according to the company’s investor documents. (Broadcom Investors)
As Monday’s open approaches, traders are focused on whether the Fidelity settlement will calm concerns about VMware’s licensing changes or highlight the threat that other major clients might challenge Broadcom’s approach in court or during negotiations.
There’s a downside risk as well. While the settlement clears a major legal cloud, it leaves open the question of how aggressively Broadcom can bundle and hike prices before customers start pulling back, switching providers, or raising new disputes. If broader churn emerges, it would hit a market already quick to punish richly valued tech stocks.
Broadcom is frequently seen as a stand-in for data-center demand, thanks to its sales of networking silicon and custom chips for major computing projects. Investors are gearing up for next week’s megacap tech earnings, hoping to glean clues about capex — the budgets that fuel orders for servers, networking equipment, and related silicon.
The macro calendar remains packed. The Federal Reserve’s upcoming policy meeting, scheduled for Jan. 27–28, takes center stage for rate-sensitive growth stocks following a volatile week in U.S. markets. (Federal Reserve)
Coming next: Monday’s response to the Fidelity settlement, followed by the Fed’s decision on Jan. 28. That same week, big-tech earnings report, setting the stage for a key mood check on AI investment and chip demand.
