Broadcom’s Longest Bet Yet: A $30 Billion Apple Pact Runs Through 2031 While AI Custom Silicon Hits Stride

The Broadcom stock story in the first half of 2026 has been one of a blistering rally that cooled fast — but the underlying business narrative is only heating up. Shares closed Friday at €350.00, a negligible 0.31% slip on the day, but the weekly gain of 7.38% underscored a broader resilience. The equity remains 18.53% below its 52-week peak of €429.60 from June, yet it sits comfortably 11.9% above its 200-day moving average of €312.69. The relative strength index of 55 points to neutral territory, suggesting the stock is regrouping after a pullback from euphoria — and with two massive growth engines now locked in, the regrouping may be temporary.

Apple has extended its chip partnership with Broadcom through 2031 in a deal valued at more than $30 billion. The agreement, confirmed in the week ending July 11, 2026, covers custom radio-frequency components and application-specific integrated circuits (ASICs) for multiple product generations. Critically, the two companies are co-developing hardware, including an AI server chip codenamed “Baltra” slated for mass production later this year. Apple currently accounts for roughly 20% of Broadcom’s annual revenue, and the long-term contract cements that contribution. Analysts see the five-year horizon as a strategic hedge for Apple, which has been working on its own connectivity silicon — the timeline suggests a full in-house switch is still years away.

To fulfill the Apple deal, Broadcom is pouring $1.5 billion into its Fort Collins, Colorado, fabrication facility on Ziegler Road, aiming to produce more than 15 billion chips annually, focusing on FBAR filters and other wireless technologies. The investment is part of Apple’s broader pledge to inject $600 billion into the U.S. economy over four years. For Broadcom, the Apple contract alone is expected to generate roughly $6 billion in yearly revenue by the end of the decade — a rare source of predictability in a notoriously cyclical industry.

But the Apple deal is only half the story. Broadcom’s AI chip business is growing at a pace that overshadows even the iPhone maker’s weight. In the fiscal second quarter of 2026, AI semiconductor revenue hit $10.8 billion, a 143% jump year-over-year. For the third quarter, management has guided for around $16 billion — a 200% surge. The company’s total AI backlog now stands at $200 billion, stretching through fiscal 2027. Key clients include Google, Meta, and ByteDance for custom ASICs. Broadcom recently unveiled “Jalapeño,” an AI inference chip developed with OpenAI for large language models, and the “Tomahawk-6” network switch, boasting 100 terabits per second capacity and targeting AI clusters. Meanwhile, the “Iris” chip, co-developed with Meta, enters mass production in September 2026.

Should investors sell immediately? Or is it worth buying Broadcom?

The AI ramp comes with a modest margin trade-off. Management expects gross margin to compress to 74% in the coming quarter as the higher mix of custom AI silicon — which carries different cost structures — dilutes overall profitability. Still, the five-year PEG ratio sits at roughly 0.4, a low multiple for a company expanding at triple-digit rates.

Wall Street remains largely bullish. Forty-four of 48 analysts rate Broadcom a “Buy,” with a consensus price target around $523. The outlier is First Group, which downgraded the stock to “Hold” on July 7, citing stretched valuation after the sharp run-up. Insider activity has added a note of caution: SEC filings from July 10 revealed that Chief Legal Officer Mark Brazeal sold 25,000 shares on July 8 at a weighted average price of roughly $379, netting about $9.48 million. Director Gayla Delly also unloaded 1,890 shares on the same day.

The dual engine of a locked-in Apple relationship and hyperscaler AI demand gives Broadcom a rare combination of stability and explosive growth. Yet the stock still trades nearly a fifth below its June high, suggesting the market is weighing valuation against execution risk. With the Iris production launch and the first concrete revenue contributions from the extended Apple contract looming, the second half of 2026 will put Broadcom’s ability to deliver on both fronts squarely in the spotlight.