Broadcom (NASDAQ: AVGO) is trading near $363, slightly higher in Friday premarket activity, but remains well below its 52-week high of $495. The early move appears to track broader market strength rather than a company-specific development.

The company is facing increased regulatory scrutiny in Europe over its VMware business. EU officials have asked European cloud providers how dependent they are on VMware and whether switching to alternative providers is practical. Regulators are also examining Broadcom’s certification requirements and whether those rules unfairly restrict cloud companies.

A March 31 deadline is approaching. After that date, some providers could lose the ability to sell VMware subscriptions under Broadcom’s revised partner program. If the concerns are not resolved, the EU could launch a formal antitrust investigation or introduce temporary measures. The deadline therefore represents the next stated regulatory milestone for Broadcom’s VMware business, while the providers’ responses will help inform the EU’s assessment of switching options and certification requirements.

Broadcom changed VMware’s licensing model after completing its $61 billion acquisition of the company in 2023. European cloud providers have subsequently raised concerns about contract changes and higher costs. Under EU competition rules, antitrust violations can result in fines of up to 10% of a company’s annual global revenue.

Analysts Continue to Raise Targets

Regulatory concerns have not stopped a largely positive view among Wall Street analysts. Piper Sandler upgraded AVGO to “strong buy” on Wednesday and assigned a $460 price target. Oppenheimer reaffirmed its “outperform” rating with a $535 target, while BMO Capital Markets raised its target to $575. KeyCorp maintained its “overweight” rating and also set a $575 target.

The analyst consensus is approximately $505.97, substantially above the current share price. Among 34 analysts tracked by MarketBeat, 29 have a Buy rating, one has a Strong Buy rating, and four have a Hold rating. DA Davidson is the outlier, maintaining a Neutral rating with a $350 target.

Broadcom opened at $360.83 on Wednesday, below its 50-day simple moving average of $383 and its 200-day simple moving average of $378. The MACD remains below its signal line. Technical levels identified in the source include resistance near $376.50 and support around $358.

AI Revenue Remains Central to the Company’s Outlook

Broadcom reported approximately $16.7 billion in AI semiconductor revenue last quarter, a record for the company. It has projected that its AI business could generate around $115 billion in fiscal 2027 and $230 billion in fiscal 2028.

Demand for custom AI accelerators and networking products from hyperscalers remains a central part of the company’s business. OpenAI recently selected Broadcom for its first custom AI chip, placing Broadcom further into the AI infrastructure supply chain.

Broadcom reported third-quarter earnings per share of $3.32, above the consensus estimate of $3.22. Revenue reached $29.59 billion, exceeding the $29.24 billion estimate and increasing 85.5% from the same quarter a year earlier.

However, the company’s near-term revenue guidance was below Wall Street expectations, prompting Truist to lower its price target. Company insiders sold approximately 61,644 shares valued at roughly $24 million during the past three months. Institutional investors hold 76.43% of Broadcom’s stock, while analysts on average expect the company to report full-fiscal-year earnings per share of $10.36.

Source: CoinCentral.