Broadcom Secures Apple Deal Amid Volatile AI Stock Performance

Broadcom Inc. secured a $30 billion contract with Apple to develop application-specific integrated circuits, a deal that includes a $1.5 billion investment from Apple to expand a Broadcom facility in Colorado. This partnership follows a period of significant share price volatility between June and July 2026, including a 19.5% drop in early June after the company failed to raise AI revenue guidance, followed by a partial recovery.

Market sentiment remains divided. Erste Group downgraded the stock to Hold on July 7, citing valuation concerns and noting that Google is diversifying its custom chip sourcing. Conversely, Jefferies Group maintained a Buy rating with a $550 price target, highlighting a long-term agreement with Google for Tensor Processing Units extending through 2031. Broadcom also partnered with OpenAI to develop a custom AI accelerator chip called Jalapeno.

Financial visibility is further supported by partnerships with Apollo, Blackstone, and Anthropic, leading UBS to maintain a Buy rating. Despite a 15% decline in share price during June, the company reported second-quarter revenue growth of 48% to $22.2 billion and expects third-quarter revenue of approximately $29.4 billion.