VMware

Broadcom has declared VMware Cloud Foundation (VCF) “AI native,” integrating artificial intelligence capabilities into its core. This move, announced amidst integration challenges following Broadcom’s acquisition of VMware, aims to address the rising demand for AI-driven solutions. VCF 9 will include VMware Private AI Services for on-premise AI deployment. While enhancing AI integration, Broadcom faces the challenge of avoiding disruptions to existing VMware deployments and addressing customer concerns over licensing and support. They also introduced enhancements to the Tanzu Platform and Intelligent Assist for VCF. The strategy balances AI innovation with preserving legacy infrastructure and revenue.

Broadcom (AVGO) is expected to release its fiscal third-quarter earnings, with investors focused on its AI sector performance. Revenue is projected to reach $15.83 billion, a 21% increase year-over-year, driven by custom silicon for cloud giants and networking solutions. Analysts anticipate continued growth due to escalating demand for AI infrastructure. Broadcom’s accelerator chips (XPUs) are gaining traction as cost-effective alternatives to GPUs. Cantor Fitzgerald projects significant revenue from custom silicon, potentially exceeding $40 billion by 2027. Stock has climbed 30% YTD. AI revenue reached $4.4 billion in Q2, and the VMware acquisition further strengthens Broadcom’s position.