Broadcom Inc. (AVGO) is enhancing its VMware offerings to expand its role in enterprise private artificial intelligence (AI) infrastructure. The introduction of VMware Cloud Foundation (VCF) 9.1 aims to improve infrastructure efficiency and support for enterprise AI inferencing, addressing the growing demand for secure on-premises and private-cloud environments. This strategic move positions Broadcom to potentially capture a larger share of the enterprise AI and hybrid-cloud spending market, amidst competition from Nutanix (NTNX) and Microsoft (MSFT).
VCF 9.1 supports heterogeneous computing with AMD, Intel, and NVIDIA architectures, allowing for a unified environment for AI, Kubernetes, and traditional workloads. In Q2 FY2026, Broadcom’s software revenues increased by 9% year-over-year to $7.2 billion, with expectations of reaching $8.9 billion in Q3, a 31% year-over-year growth, driven by strong demand for VCF.
Broadcom’s infrastructure software business reported a 93% gross margin in Q2, while operating income rose due to increased deployments. However, the company faces intense competition as Nutanix presents flexible alternatives for hybrid-cloud deployments and Microsoft’s Azure surpassed $100 billion in annual revenue, bolstering its enterprise AI ecosystem.
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