$VMW: Broadcom’s Private Cloud Bet — Yet $102.5M Settlement Shadows Progress

Court: N.D. California

Case: 5:20-cv-02182

At VMware Explore 2025, Broadcom highlighted execution of its “all-in” private cloud vision, showcasing VCF 9.0 with Kubernetes, Data Services, and embedded Private AI at no additional cost. Partnerships with Canonical and NVIDIA aim to fast-track AI workloads, while incentive programs seek to push adoption. Still, even as VMware advances under Broadcom’s ownership, a $102.5 million settlement over backlog misstatements continues to weigh on its reputation.

• VCF 9.0 launched with Kubernetes and enterprise Data Services baked in.
• Expanded Canonical partnership to strengthen AI and container workloads.
• Private AI included as standard in VCF subscriptions.
• Incentives: complimentary pro services worth 10% of VCF license to drive adoption.
• $30B total contract value in VCF deals across three years reported.
• Overhang: $102.5M settlement tied to alleged misleading sales backlog disclosures.

Timeline Overview

• Aug 23, 2018: Start of alleged misstatements on VMware’s sales backlog.
• 2019–2020: Multiple disclosures of declining backlog triggered stock drops.
• Feb 27, 2020: End of class period for investor claims.
• Oct 4, 2024: Settlement of $102.5M in cash agreed.
• Mar 31, 2025: Settlement fairness hearing scheduled in federal court.

Allegations Include

• Misleading investors on unfilled orders and sales backlog.
• Artificially inflating stock price by overstating demand visibility.
• Failing to disclose backlog declines in real time.
• Violations of Exchange Act §10(b) and Rule 10b-5.

Investor Update

• $102.5M cash settlement to be distributed via approved claims.
• Eligible investors: Class A stock purchased Aug 24, 2018 – Feb 27, 2020.
• Claim deadline: March 17, 2025.
• Legal overhang continues despite VMware’s pivot to AI-driven private cloud growth.

You can check more information about it HERE.