Shares of fabless chip and software maker Broadcom (NASDAQ:AVGO) rose 2.1% in the afternoon session after the company announced plans to expand its strategic partnership with NEC Corporation to drive adoption of the modern private cloud. Under the agreement, the two companies planned to use Broadcom’s VMware Cloud Foundation (VCF) to help customers modernize their own private cloud systems. NEC planned to leverage the skills and expertise gained from implementing VCF into its own IT systems to help other customers. The collaboration was intended to help customers ensure safety and accelerate innovation.
After the initial hit, shares cooled to $347.80, up 2.1% from the previous close.
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Broadcom’s stock is highly volatile, having seen 26 moves of more than 5% in the past year. In that context, today’s move indicates that the market sees this news as meaningful, but not as something that would fundamentally change its perception of the company.
The previous big move we wrote about was six days ago, when stocks fell 5% on news that markets continued to retreat as investors reevaluated the high valuations of stocks that benefited from the artificial intelligence boom.
After a fantastic run, many of those high-flying AI and technology stocks saw investors taking profits: selling shares to protect their gains. This is often called a ‘market rotation’. Money is moving out of the red-hot tech sector (which some fear has become too expensive) into other parts of the market that investors may currently view as more stable or more reasonably priced. There is a secondary reason for the cautious vote: the long government shutdown was coming to an end. While this is generally interpreted as good news, it also means that there will be a flood of delayed economic reports. For weeks, investors were flying blind without key updates on the health of the economy, such as inflation data and the jobs report. In typical “sell the news” fashion, investors may also take profits and sell on the expectation that the new data might give the Federal Reserve reasons to slow or even pause future rate cuts.
Broadcom is up 49.9% since the start of the year, but at $347.80 per share it is still trading 9.9% below its 52-week high of $385.98 set in October 2025. Investors who bought $1,000 worth of Broadcom stock five years ago would now be looking at an investment worth $9,049.
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