Kyndryl and Broadcom expand VMware AI alliance

The expanded alliance with Broadcom is a strategic move for Kyndryl as it tries to move away from legacy, low-margin contracts toward more profitable consulting and AI-governed services. By deepening its role in VMware Cloud Foundation deployments, Kyndryl positions itself as a key partner for enterprises building AI-ready private and hybrid clouds. The planned upskilling of several thousand consultants shows that execution will be critical.

Kyndryl's recent launch of Agentic Modernization services on Kyndryl Bridge directly supports this alliance, providing a common tooling layer for managing VMware and multi-cloud estates. If adopted widely, it could drive higher-margin software-enhanced services. However, the company still faces pressure from legacy contracts, and analysts project flat revenue with a need for earnings growth from $198.0 million to $472.5 million by 2029. Near-term risks include revenue lumpiness and complex renewals, meaning successful execution is essential.