New York, February 1, 2026, 17:40 EST — Market closed
Key points:
- Broadcom shares edged up 0.17% Friday, standing out as the Nasdaq fell.
- Wolfe Research raised its rating on the stock, highlighting a surge in Alphabet’s in-house AI chip production.
- Separately, a report on stricter terms for VMware cloud partners thrust the software company back into the spotlight.
Broadcom shares closed Friday at $331.30, up 0.17%, before slipping a bit in after-hours trading as U.S. markets wrapped up the week. (Investing)
The stock’s direction now seems to depend more on how the market views AI spending and enterprise software—narratives that have driven most of the momentum lately—than on Broadcom itself.
This shifts the focus from simply “AI demand is strong” to the more critical question of “who actually gets paid, and with what margin.” Broadcom finds itself caught in the middle—providing custom silicon and networking gear while working to prevent VMware’s move to subscriptions from becoming a customer exodus.
U.S. stocks dropped Friday after President Donald Trump nominated Kevin Warsh to replace Jerome Powell as Federal Reserve chair, coupled with a surprise spike in inflation. Broadcom, however, bucked the trend, closing higher. (Reuters)
Wolfe Research’s Chris Caso bumped Broadcom to “Outperform” from “Peer Perform,” setting a $400 price target. He pointed to “channel checks” indicating a steep jump in AI chip shipments linked to Alphabet’s Tensor Processing Units (TPUs), the processors built for AI model training and deployment. (TipRanks)
Wolfe’s thesis hinges on a straightforward wager: Alphabet’s move to sell TPUs to outside firms will expand demand beyond its own use, and Broadcom stands to gain as a crucial supplier. In another note highlighted by Investing, Wolfe also raised its forecasts for Broadcom’s AI-related ASIC revenue—custom chips built for specific tasks—and pointed to rapid growth in AI networking income as well.
Not all the buzz leaned positive. According to The Register, Broadcom has issued non-renewal notices to certain VMware Cloud Service Provider partners, urging them to close out open deals by March 31. Smaller providers warn this could disrupt customer transitions. Kristian Liivak, CTO and founder of WaveCom AS, called Broadcom a “bulldozer.” (The Register)
For equity traders, disruptions in partner channels can swing both ways. Broadcom might gain leverage to push tighter pricing and nudge customers toward preferred bundles. Yet, it also risks sparking chatter about churn if clients face fewer buying options or higher switching costs.
Early in the week, macro data could overshadow company-specific news. December’s producer price index, tracking wholesale inflation, climbed 0.5%, exceeding economists’ expectations. That pushed Treasury yields up, according to Reuters. Traders are now focused on next Friday’s U.S. jobs report and the Fed’s favorite inflation measure due February 20 for clues on rate moves.
Another hurdle this week: earnings season. Reports from Advanced Micro Devices, Alphabet, Amazon, and Qualcomm could shift forecasts for cloud capex and AI infrastructure spending — key figures that usually sway Broadcom’s shares, even if Broadcom itself isn’t reporting. (Kiplinger)
Broadcom bulls face a notable risk: profitability. Back in December, the company flagged that gross margins might shrink as AI takes up a larger share of its business. Reuters has highlighted investor worries that reliance on systems sales and a handful of major AI clients could magnify volatility if demand or pricing wavers. (Reuters)
Broadcom’s shares have stayed steady amid a volatile January, though Monday’s outlook looks complicated — with AI enthusiasm clashing against concerns over interest rates and some VMware partner uncertainties.
Markets are gearing up for Alphabet’s earnings on Wednesday, keen to gauge any signals on TPU production and 2026 capital expenditure. Broadcom’s earnings are penciled in for March 5, after the close, per MarketBeat. (Marketbeat)
