January 2, 2026, 04:30 ET — Premarket
- Broadcom ended the final session of 2025 lower ahead of Wall Street’s first full trading day of 2026.
- Investors are watching AI-chip profitability and incoming U.S. data for clues on rates and risk appetite.
- Chip stocks broadly eased in thin holiday trading, keeping pressure on the sector.
Broadcom Inc shares were last down 1.1% at $346.10, after closing out 2025 about 16.5% below their 52-week high. The stock, which gained about 49% in 2025, is one of the market’s biggest AI infrastructure bellwethers.
The move matters because Broadcom sits at the intersection of two trades investors have leaned on: AI hardware and recurring software. The company sells networking chips and custom processors built to order for large customers, while its VMware business ties it to enterprise software budgets.
With U.S. markets reopening after the New Year holiday, traders are using early price action in mega-cap tech to gauge whether investors will keep paying up for growth. Broadcom’s swings have increasingly been treated as a read-through on data-center spending, not just one company’s outlook.
Global markets began 2026 on firmer footing and U.S. stock-index futures were higher in early trading, but the backdrop remains unsettled. Investors are weighing a stream of economic data — including reports delayed by the U.S. government shutdown — and potential volatility tied to President Donald Trump’s expected pick to replace Federal Reserve Chair Jerome Powell later this month.
Wall Street ended 2025 with hefty annual gains but finished the year’s final session lower in thin holiday trade, with technology among the biggest drags. “It’s perfectly fine in any bull market to have moments of cost,” said Giuseppe Sette, co-founder and president of Reflexivity, pointing to profit-taking when liquidity is low.
Semiconductor bellwethers also eased in that final session. Nvidia and Advanced Micro Devices ended down about 0.5%, while memory maker Micron Technology fell about 2.5%, adding to the caution around the broader chip group.
For Broadcom, the AI debate has sharpened around profitability. The company said in December that a larger mix of lower-margin custom AI processors would pressure gross margin — a measure of how much profit a company keeps after direct costs — even as it forecast first-quarter revenue of about $19.1 billion. Reuters
That tension has left investors demanding clearer proof that surging AI sales translate into durable earnings growth. It also makes the stock more sensitive to shifts in sentiment toward the AI supply chain, where customers are still spending heavily but investors are increasingly focused on returns.
Traders are also watching whether the stock can stabilize after its late-December retreat from record highs. Broadcom’s distance from its peak has become a simple test of whether investors are willing to reprice AI exposure lower or step back in on dips.
Macro data is the next near-term catalyst for the whole group. Next week’s U.S. jobs report is expected to draw particular attention because rate expectations can move tech valuations quickly; a Reuters poll cited payroll growth of about 55,000 in December and unemployment at 4.5%.
For Broadcom, the next company-specific checkpoint is its next quarterly update, when investors will look for signs that AI-related revenue is holding up without further margin erosion. Updates on networking demand, enterprise-software trends and VMware integration will also be in focus.
