Broadcom's Split Screen: Record AI Guidance on One Side, Brussels Scrutiny on the Other

Broadcom declared a $0.65 quarterly dividend while EU regulators deepen their VMware licensing probe and AI chip revenue guidance rises to about $115B.

Broadcom finds itself telling two very different stories at once. On one screen, the chipmaker is sketching out an AI-driven growth curve that few peers can match. On the other, European regulators are quietly tightening their grip on the software business it spent a fortune to acquire.

The contrast is sharp enough that investors are being forced to weigh them in parallel rather than in sequence.

A Dividend That Keeps Ticking

Start with the steadier side of the ledger. Broadcom's board signed off on a quarterly cash dividend of $0.65 per share, payable on September 30 to holders of record as of 5:00 p.m. Eastern Time on September 21. For income-focused portfolios, that payout has become a dependable fixture — one that keeps delivering even when the share price wobbles.

The stock has certainly wobbled. After a record run, the equity has handed back 8.9% over the past 30 days. On Thursday it traded pre-market at €298.95, up 1.0% from Wednesday's close of €296.00. The current print of €299.75 sits roughly 9% below its 50-day moving average of €329.38 — a gap that suggests the near-term trend has yet to find its footing, even with a 1.3% gain on the day offering some relief.

Brussels Turns Up the Heat on VMware

The regulatory front is where the picture gets murkier. EU competition authorities have sharpened their probe into the licensing terms Broadcom has imposed on VMware customers since swallowing the software vendor. No interim measures have been ordered against the company so far, but the investigation is moving forward actively — an open-ended process that could weigh on the infrastructure software unit if Brussels ultimately demands stricter conditions.

That unit is no side business for Broadcom. In the third fiscal quarter, reported in early September, its performance fell short of expectations.

The AI Numbers That Dwarf Everything Else

Set against that regulatory overhang is a growth story that is hard to ignore. In the third quarter ended August 2, Broadcom posted revenue of $29.6 billion — an 86% jump year over year. Adjusted operating income came in at $20.1 billion, with adjusted earnings per share of $3.32. The figures make clear that the company has so far been scaling its expansion profitably.

Guidance has been raised to match. Broadcom lifted its AI chip revenue forecast for fiscal 2027 from roughly $100 billion to about $115 billion, and dangled approximately $230 billion for fiscal 2028. Such leaps are rare in the semiconductor industry, and they initially stoked expectations even higher.

CEO Hock Tan reinforced the message about a week ago, arguing that demand for AI chips is more likely to overshoot the $115 billion fiscal 2027 target than to fall short. He also defended the medium-term outlook for 2027 and 2028 against investor jitters triggered by an essay from Anthropic chief Dario Amodei, who called for a more measured pace in developing AI models.

Why the Stock Slipped Despite the Headlines

The pullback that followed the guidance hike — a 5.7% decline over roughly a week — looks contradictory next to those fundamentals. In practice, it reflects profit-taking after the rally rather than any deterioration in the business.

Analysts have largely shrugged off the retreat. Piper Sandler resumed coverage of Broadcom on September 10 with a Buy rating and a $460 price target, a vote of confidence that landed while the shares were still sliding. The broader analyst community has argued that the risk of Google pursuing an insourcing strategy is already baked into the price, following the stock's significant retreat from its 2026 high.

From their vantage point, Broadcom represents "the cleanest listed route" to participating in the buildout of AI infrastructure — particularly with Anthropic's impending IPO on the horizon.

Two Fronts, One Watchlist

The VMware dispute is unlikely to be the deciding factor for the share price in the near term, yet it remains a wildcard capable of overshadowing otherwise robust operating momentum in the semiconductor business. The real question for investors is no longer whether Broadcom's growth is intact, but whether the recent setback marks an entry point or the start of a longer consolidation after an extraordinary run.

Either way, both fronts — regulatory pressure from Brussels and the trajectory of AI demand — deserve attention side by side.