VMware Cloud Foundation to unify and secure cloud and edge operations across Walmart's infrastructure, and enable a frictionless developer experience that accelerates innovation LAS VEGAS, Aug. 26, 2025 (GLOBE NEWSWIRE) -- VMware Explore 2025—Broadcom Inc. (NASDAQ: AVGO) and Walmart Inc. (NYSE: WMT) today announced a strategic collaboration to deliver a modern private cloud and edge environment. As part of this initiative, Broadcom has been named a strategic vendor for virtualization software solutions, lev ...

Core Insights - Broadcom Inc. is enhancing VMware Cloud Foundation (VCF) to accelerate enterprise adoption of Private AI as a Service, with nine of the top 10 Fortune 500 companies already committed to VCF and over 100 million cores licensed globally [1][2] - VCF 9.0 will integrate VMware Private AI Services as a standard component, positioning it as an AI-native platform for secure and scalable private cloud infrastructure [1][3] Group 1: AI Innovations and Features - VCF is designed to support AI workloads with GPU precision, enabling organizations to run, move, and govern AI models securely [3] - Native AI services included in VCF 9.0 will enhance privacy and security, simplify infrastructure, and streamline model deployment, with availability expected in Broadcom's Q1 FY26 [3] - Upcoming AI innovations will include support for NVIDIA Blackwell Infrastructure, enhancing the capabilities of VCF for demanding workloads [4] Group 2: Developer and Infrastructure Enhancements - VCF provides a vSphere Kubernetes Service (VKS) for agile app development, allowing developers to focus on applications rather than infrastructure [7] - The integration of GitOps and Argo CD will streamline secure application delivery, ensuring consistent and auditable deployments [11] - Multi-tenant Models-as-a-Service will enable secure sharing of AI models while maintaining data privacy and isolation [5] Group 3: Collaborations and Ecosystem Expansion - Broadcom is collaborating with AMD to enhance enterprise AI infrastructure, allowing customers to leverage AMD ROCm™ and Instinct™ MI350 Series GPUs for AI workloads [6] - The partnership with Canonical aims to accelerate the deployment of modern container-based and AI applications [11] Group 4: Customer Testimonials - Grinnell Mutual reports enhanced agility, efficiency, and security through VCF, fostering collaboration across traditionally separate teams [9] - New Belgium Brewing Company highlights cost efficiencies and improved IT operations with the integrated VCF 9.0 platform [9]

New VCF and Advanced Services Innovations Address Compliance Complexities in Regulated Industries and Security Gaps posed by New Agentic AI WorkloadsLAS VEGAS, Aug. 26, 2025 (GLOBE NEWSWIRE) -- VMware Explore 2025—Today, Broadcom Inc. (NASDAQ: AVGO) announced VMware Cloud Foundation (VCF) Advanced Cyber Compliance and new innovations across VMware vDefend and VMware Avi Load Balancer to strengthen resilience, compliance and security for customers adopting a modern private cloud in regulated industries. Cybe ...

Collaboration combines the leading Cloud OS with the industry's first unified private cloud platform to accelerate cloud native innovation LAS VEGAS, Aug. 26, 2025 (GLOBE NEWSWIRE) -- VMware Explore 2025 -- Broadcom Inc. (NASDAQ: AVGO) and Canonical today announced an expanded collaboration to help customers ship modern container- based and AI applications faster and more securely. By bringing together Canonical's trusted open-source software with VMware Cloud Foundation (VCF), the industry's first unified ...

Core Viewpoint - Morgan Stanley's report highlights strong demand trends in artificial intelligence (AI) driving growth for Broadcom's custom AI XPU business and high-performance networking product portfolio [1][3] Group 1: AI Demand and Market Potential - AI demand remains robust, with inference workloads creating additional demand that was not included in the previous 2027 serviceable available market (SAM) forecast, indicating potential upside [2] - The execution in product technology development is strong, with 2nm 3.5D AI XPU products expected to complete tape-out this year, and the first generation AI XPU products also anticipated to complete tape-out, with partnerships established with key potential clients [2][3] Group 2: Networking and Non-AI Business Recovery - AI computing workloads are driving strong networking demand, significantly enhancing unit value in expanded networks, providing substantial revenue capture opportunities [2] - Non-AI semiconductor business is experiencing a "U-shaped" gradual recovery, with observed order/reservation inflection points expected to drive earnings per share (EPS) upgrades next year [2] Group 3: VMware and Overall Financial Outlook - The VMware Cloud Foundation (VCF) platform transition is expected to continue driving strong growth for VMware business, projected to reach an annual revenue of $20 billion by the end of 2026 or 2027, with growth rates returning to mid to high single digits thereafter [2] - Despite some margin pressure in AI XPU business, overall semiconductor operating profit margins are expected to continue expanding due to operational leverage, with management focusing on reinvestment in AI growth opportunities rather than acquisitions [3] Group 4: Market Position and Valuation - Broadcom is positioned as the second-largest AI semiconductor supplier globally and the largest custom chip (ASIC) supplier, with a strong presence in wireless communication, data center networking, AI/deep learning ASICs, storage, and infrastructure silicon chips [3][4] - Morgan Stanley maintains a price target of $325 for Broadcom by December 2025, representing approximately 18% upside from the closing price of $275.4 on July 10 [3]

Core Viewpoint - Broadcom has initiated audits on former VMware customers who have not renewed their support contracts, following a significant price increase of up to 300% for VMware products due to Broadcom's bundling strategy [1][3][7]. Group 1: Audit Initiation - Broadcom has begun sending "stop and cease usage" letters to VMware users whose support contracts have expired, demanding they stop using all updates and patches released since the termination of their contracts [1][2]. - An audit has been launched for a Dutch software supplier, which has been a VMware customer for about ten years, indicating that Broadcom is actively reviewing compliance with VMware software usage [3][4]. Group 2: Customer Concerns - Customers express concerns about the financial impact of the audits, with some fearing it could affect salary negotiations and lead to layoffs due to budget constraints [5]. - There are reports of companies receiving audit notifications despite having ceased using VMware products, raising questions about the validity of Broadcom's audit process [7][8]. Group 3: Market Reaction - Broadcom's aggressive enforcement of VMware licensing agreements has generated backlash among existing and former customers, with calls for regulatory scrutiny of its practices [9]. - The acquisition of VMware for $69 billion is viewed as a successful transaction, yet the ongoing issues with customer relations and compliance audits may tarnish Broadcom's reputation in the market [9].

Core Insights - Broadcom (AVGO) and Cisco Systems (CSCO) are significant players in the enterprise security software market, offering a range of solutions including endpoint, network, and identity security [2] - Enterprise spending on cybersecurity is projected to grow 14% to $118.5 billion by 2025, driven by demand for Generative AI and cloud adoption [3] - Both companies are experiencing strong stock performance, with Broadcom and Cisco shares appreciating 10.3% and 9.8% year to date, respectively [4] Broadcom (AVGO) Insights - Broadcom's security offerings are part of its broader Infrastructure Software segment, which accounted for 44% of revenues in Q2 fiscal 2025, with revenues rising 25% year over year to $6.6 billion [8] - The company anticipates infrastructure software revenues of approximately $6.7 billion in Q3 fiscal 2025, reflecting a 16% year-over-year increase [9] - Broadcom's focus on AI-powered security solutions is evident with the introduction of VMware vDefend and Incident Prediction features [10][11] - The company expects AI revenues to increase by 60% year over year to $5.1 billion in Q3 fiscal 2025, supported by strong demand for custom AI accelerators [20] Cisco Systems (CSCO) Insights - Cisco's security revenue surged 54% year over year in Q3 fiscal 2025, driven by strong demand for its security solutions and a significant multiyear deal with a financial services company [12][13] - The company is integrating AI across its security and collaboration platforms, enhancing its competitive position [12] - Cisco's security business is benefiting from the acquisition of Snap Attack and the introduction of solutions like Cisco Secure AI Factory [14] - The consensus estimate for Cisco's fiscal 2025 earnings has increased by 1.6% to $3.79 per share, indicating a 1.61% growth over fiscal 2024 [15] Valuation Insights - Both Broadcom and Cisco are considered overvalued, with Broadcom trading at a forward Price/Sales ratio of 17.48X, significantly higher than Cisco's 4.38X [17] - Despite the valuation concerns, both companies have consistently beaten earnings estimates in the past four quarters, with Cisco showing a slightly better average surprise of 3.94% compared to Broadcom's 3.2% [16]