Why Did Broadcom AVGO Drop 3.02%? Policy Changes Spark Backlash

On April 21, 2025, Broadcom's stock experienced a 3.02% drop in pre-market trading, reflecting investor concerns and market reactions to recent policy changes and external factors.
Broadcom's recent adjustments to its VMware licensing policies have sparked significant controversy. In March, the company announced that customers renewing or purchasing new VMware licenses would need to buy at least 72 CPU cores, a move that was met with widespread criticism, particularly from small and medium-sized enterprises. The policy was seen as overly stringent, forcing companies to incur unnecessary costs even if their actual needs were lower.
Additionally,
introduced a 20% penalty for customers who delayed their license renewals, further straining the budgets of many businesses. This dual policy change led to a backlash from customers, who felt that Broadcom was exploiting their situation. The outcry was so intense that Broadcom ultimately decided to revoke the 72-core minimum purchase requirement, reverting to the previous 16-core standard.Despite the reversal, the incident has had a notable impact on Broadcom's brand image and market reputation. The company now faces the challenge of balancing profitability with the needs of both large and small enterprises. Future policy adjustments will be crucial in maintaining customer trust and market stability.

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