Broadcom Inc. (AVGO) shares surged 4.83% on Wednesday, closing at $388.69, after Apple revealed a multi-year chip supply deal exceeding $30 billion. The announcement, part of Apple's broader $600 billion U.S. investment pledge, includes a $1.5 billion capital commitment to expand Broadcom's Fort Collins, Colorado facility. The stock continued rising in Thursday's premarket, gaining another 1.35% to trade around $393.94.
Wall Street analysts are bullish, with a consensus “Strong Buy” rating and a 12-month average price target of $516.91, implying roughly 33% upside. William Blair initiated coverage with a Buy rating, while UBS and Bank of America reiterated Buy ratings in recent weeks. However, Erste Group downgraded AVGO to Hold just a day before the deal was revealed. Broadcom also has lucrative partnerships with OpenAI, Meta, and Alphabet, further bolstering its AI semiconductor revenue, which jumped 143% year-over-year to $10.8 billion last quarter. Revenue expectations for the upcoming quarter are $29.44 billion, with earnings per share projected at $3.16, up sharply from $1.69 a year ago.
Technically, AVGO trades above its 20-day, 100-day, and 200-day moving averages but remains below its 50-day SMA near $406.79. The stock is down about 20% from its June high of $495, putting it in a local bear market. Analysts remain optimistic, with Jefferies predicting the OpenAI deal alone could generate over $50 billion by 2028. The next earnings report is expected on September 3, 2026.
