Broadcom Shares Jump After Securing Multi-Billion Dollar Chip Deal with Apple

Shares of chipmaker Broadcom (AVGO) climbed more than 4% in morning trading after Apple formally announced a multi-year supply agreement valued at over $30 billion. The deal ensures Broadcom will continue to be a key supplier for Apple products into the next decade, running through 2031.

Under the terms of the agreement, Broadcom will develop and provide custom ASIC silicon chips and advanced wireless components, including FBAR radio frequency filters, for multiple generations of Apple devices. To support the partnership, Broadcom also plans to invest $1.5 billion to expand and modernize its manufacturing facility in Fort Collins, Colorado.

The announcement provides significant relief to investors who had been concerned about the possibility of Apple, which accounts for approximately 20% of Broadcom’s annual revenue, moving its chip design entirely in-house. By securing this long-term collaboration, which also includes AI workloads, the deal solidifies a crucial revenue stream for Broadcom.

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Broadcom’s stock gained ground despite a downturn in the broader market, where major indices like the S&P 500 and Dow Jones were down amid rising geopolitical tensions. The company-specific news appeared to overshadow a recent analyst downgrade from Erste Group, which had cited valuation concerns. The deal reinforces Broadcom's strategic position as a core infrastructure provider, particularly as it aims for significant growth in AI-related revenue.