New York, Jan 23, 2026, 10:34 EST — Regular session
- Shares of Broadcom dropped roughly 3% in early trading following Thursday’s close
- Chip stocks slipped as investors digested earnings forecasts ahead of next week’s Fed meeting
- A fresh U.S. government contract for software purchasing thrust Broadcom’s VMware portfolio back into the spotlight
Broadcom shares dropped 2.7% to $316.78 in Friday morning trading, stepping back from Thursday’s close at $325.49.
This shift is significant since Broadcom now serves as a fast proxy for two major plays: data-center hardware linked to AI expansions and hefty enterprise software spending via VMware.
When markets stumble, that balance works both ways. Traders are zeroing in on guidance—not just earnings—as the clearest indicator, sending the tape into fits ahead of the Federal Reserve’s first policy move of the year in a few days.
U.S. stocks fell as Intel dropped 14.9% following a disappointing outlook, dragging the Philadelphia Semiconductor Index down 1.6%. “Guidance now is more critical than ever,” said Peter Cardillo, chief market economist at Spartan Capital Securities. He noted investors remain cautious ahead of the Fed. 1
Broadcom caught investors’ attention this week after the U.S. General Services Administration announced a “OneGov” deal with the company, offering federal agencies discounts of up to 64% on select VMware software. GSA Administrator Ed Forst said the agreement would “save taxpayers money.” Broadcom CEO Hock Tan described it as a partnership that “advances the core objectives of the OneGov Strategy.” The contract runs through May 2027, focusing on AI-ready tools and “zero trust” security—an approach that treats no user or device as trusted by default. 2
Neither party revealed the anticipated dollar amount from the federal discount package, nor did they specify how fast agencies might move their purchases under the program.
Broadcom faces a risk that its growth could come at the cost of slimmer profits. CFO Kirsten Spears warned in December that “gross margin [is] expected to be down approximately 100 basis points” quarter-on-quarter, driven by a bigger share of AI-related revenue. 3
Investors are also eyeing a near-term update on company specifics. Broadcom announced during its last earnings call that it will release fiscal first-quarter results after the market closes on March 4. 4
Traders are also focused on the Fed’s meeting set for Jan. 27–28, with Chair Jerome Powell’s press conference slated for Jan. 28. 5
