Broadcom shares gained 9.5% to $321 in Monday’s trade after the company announced a series of developments around its VMware business and Kubernetes ecosystem, including the acceptance of its Virtual Machine (VM) API project into the Cloud Native Computing Foundation (CNCF) Sandbox.
The rally marked a sharp reversal from the recent sell-off and put the stock on track for its biggest single-day gain in a year.
The announcement, made at KubeCon North America, is aimed at strengthening enterprise virtualisation and cloud-native infrastructure capabilities as businesses increasingly adopt artificial intelligence (AI) and agentic AI workloads.
The company in its press release said that VM API project allows virtual machines to be provisioned and managed through Kubernetes APIs across different infrastructure providers.
Broadcom also announced that it would co-chair the newly formed Workload Conformance Working Group within the Kubernetes community to establish common standards for running workloads on Kubernetes.
Broadcom expands VMware’s role in cloud-native infrastructure
The company said more than 20 new partner solutions have been validated for VMware vSphere Kubernetes Service (VKS), giving enterprise customers greater choice and flexibility.
Dilpreet Bindra, senior director of engineering at Broadcom’s VMware Cloud Foundation Division, said modern AI and agentic workflows require virtual machines to operate within cloud-native ecosystems.
He added that Broadcom’s contributions to the Kubernetes community are intended to address emerging infrastructure challenges and make Kubernetes easier for enterprises to operate.
The company said moving the VM API project under CNCF stewardship would help develop a community-driven standard for managing virtual machines across multiple infrastructure providers. This could allow virtual machines and containers to operate under a unified infrastructure control plane.
AI workloads drive demand for virtual machines
The announcement comes amid growing demand for infrastructure capable of supporting both virtual machines and containers as enterprises scale AI deployments.
According to the 2026 Virtual Machines Report released by the Linux Foundation, virtual machines account for 53% of production applications among the 492 practitioners surveyed, with most organisations expecting that share to remain broadly stable.
The report also found that 34% of organisations expanding their virtual machine footprint cited AI and agentic workloads as a contributing factor.
Matthew Flug, research manager for Intelligent Application Modernization and Deployment Platforms at IDC, said virtual machines and containers would continue to coexist as enterprises expand their AI and cloud-native initiatives.
He added that managing both through a common control plane could help enterprises maintain consistent governance and policy enforcement while reducing concerns around vendor lock-in through open standards.
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