Broadcom Settles Fidelity Software Dispute as Analysts Boost AI Outlook

The deal resolves access concerns tied to VMware bundling, shifting attention to Broadcom’s trajectory in custom AI hardware.

Overview

Fidelity agreed to voluntarily dismiss its Massachusetts lawsuit after Broadcom committed on January 28 to continue supplying software and services to a Fidelity subsidiary, with Fidelity saying operations will not be disrupted.
Wolfe Research upgraded Broadcom to Outperform on January 30 with a $400 target, citing checks that suggest the company could ship up to 7 million TPUs by 2028 and that AI revenue could double by 2027 in its bullish case.
Counterpoint Research expects Broadcom to hold roughly 60% of AI server compute ASIC design share by 2027, reinforcing its standing as a key custom silicon partner.
Bank of America named Broadcom a top compute pick on January 26, pointing to strong cloud capex trends and projecting robust sales and EPS growth for leading compute names through 2027.
Broadcom guided to a roughly 100-basis-point sequential decline in Q1 gross margin due to a higher AI mix, and it expects more AI system shipments in the second half that could pressure margin percentages while lifting gross margin and operating profit dollars.