Broadcom's stock surged 21% over the past two weeks, closing at $393 in after-hours trading on Tuesday, following the announcement of two major long-term artificial intelligence chip partnerships with tech giants Meta and Google. The stock is now within striking distance of its all-time high of $414.61.
The expanded partnership with Meta runs through 2029 and involves Broadcom designing and supplying custom AI processors using a cutting-edge 2nm manufacturing process. These chips, branded under Meta's MTIA (Meta Training and Inference Accelerator) program, will power ranking, recommendation, and AI inference systems across Meta's applications. The initial commitment is for over one gigawatt of computing capacity, described by Meta as just "the first phase of a sustained, multi-gigawatt rollout." Meta CEO Mark Zuckerberg stated the deal would help "build out the massive computing foundation we need to deliver personal superintelligence to billions of people." As part of the agreement, Broadcom CEO Hock Tan will step down from Meta's board to move into an advisory role focused on custom chip strategy.
Simultaneously, Broadcom's existing partnership with Alphabet (Google) has been extended through 2031. This agreement covers the development of future generations of Google's Tensor Processing Units (TPUs) and the supply of key networking components. These deals collectively position Broadcom as a core infrastructure partner for two of the world's largest AI spenders.
Wall Street analysts maintain a Strong Buy consensus on Broadcom (AVGO), with an average price target of $464.32, implying roughly 22% upside from current levels. This optimism is fueled by the company's reported AI-related revenue, which more than doubled to approximately $8.4 billion in the latest quarter, with strong forward projections. Despite some insider selling activity by senior executives, investor sentiment remains highly positive, reflecting a broader market trend favoring companies with clear, contract-driven AI revenue visibility.
