Broadcom Inc. (AVGO) is back in the European Union's crosshairs, this time over how it has reshaped VMware's licensing practices since buying the company for $61 billion.

EU Questions Cloud Providers

EU regulators have asked European cloud companies about their reliance on VMware and whether they can easily switch to alternatives, Bloomberg reported Friday. Officials are also examining Broadcom's certification rules and potential restrictions on cloud providers.

The review comes ahead of a March 31 deadline. After that, some providers could lose the ability to sell VMware subscriptions under Broadcom's revised partner program.

Formal Probe Possible

The commission could open a formal antitrust investigation or impose temporary measures if concerns persist.

Broadcom changed VMware's licensing model after completing the acquisition in 2023. European cloud providers have since raised concerns about contract changes and higher licensing costs, Bloomberg reported.

EU antitrust violations can carry fines of up to 10% of a company's annual global revenue.

Broadcom Stock Performance

Broadcom stock rose in Friday premarket trading as broader technology stocks gained. Nasdaq futures climbed 0.64%, while S&P 500 futures added 0.59%.

The early gain appears tied to broader market strength rather than a company-specific catalyst. However, Broadcom remains below key technical levels after pulling back from its 52-week high of $495.

Shares are about 1.9% below their 20-day simple moving average of $370.29 and 5.3% below the 50-day SMA of $383.23. The MACD also remains below its signal line, pointing to weaker near-term momentum.

Broadcom faces resistance near $376.50, while support sits around $358.

Broadcom Analyst Outlook

Broadcom carries a Buy consensus rating with an average price forecast of $518.96.

Piper Sandler initiated coverage Thursday with an Overweight rating and a $460 price forecast. Citigroup recently raised its forecast to $515 while maintaining a Buy rating. DA Davidson lowered its forecast to $350 and maintained Neutral.

AVGO Stock Price Activity: Broadcom shares were up 0.53% at $362.73 during premarket trading on Friday, according to market data.