NEW YORK, July 6, 2026 — Broadcom Inc. (NASDAQ: AVGO) saw its shares rise 3.74% in premarket trading to $373.94 on Monday after the company announced an extension of its chip supply agreement with Apple Inc. (NASDAQ: AAPL) through 2031. The deal, which covers custom silicon and radio frequency (RF) components, removes a key overhang for investors worried about revenue concentration and the loss of a major non-AI client.
Analysts cited by Reuters estimate that Apple accounts for roughly 20% of Broadcom's annual revenue. The extended contract provides visibility into a significant portion of Broadcom's device-related business for the next six years, a period during which the company is also ramping up its artificial intelligence (AI) chip operations.
Nasdaq trading resumed at 9:30 a.m. ET after being closed on July 3 for the Independence Day holiday. The premarket move added approximately $64 billion in market capitalization, based on Broadcom's 4.76 billion outstanding shares. The stock had closed at $360.45 on July 2, down 2.41%.
Deal Details and Strategic Context
The Apple extension is the latest in a series of long-term agreements Broadcom has secured. In April, the company announced a similar deal with Alphabet Inc.'s Google (NASDAQ: GOOGL) to supply custom AI chips and AI rack hardware through 2031. Additionally, Anthropic is tied to about 3.5 gigawatts of Google-chip compute starting in 2027. The Apple deal now gives Broadcom a major device customer on the same timeline, diversifying its revenue base beyond AI infrastructure.
“The 2031 end date is key,” noted the original report. “Broadcom made a long-term agreement with Google in April to build and supply custom AI chips and AI rack hardware up to 2031. The pact with Apple gives Broadcom a big device customer on the same schedule.”
Earnings and AI Revenue Outlook
Broadcom's most recent quarterly report highlighted strong AI growth but fell short of some Wall Street expectations. Second-quarter revenue came in at $22.187 billion, slightly below the $22.27 billion consensus estimate. AI semiconductor revenue reached $10.8 billion, up 143% year-over-year. For the third quarter, the company guided for revenue of approximately $29.4 billion and AI semiconductor revenue of $16.0 billion, which was below analysts' $16.36 billion forecast from Visible Alpha.
CEO Hock Tan reiterated the company's ambitious goal of $100 billion in AI chip sales by 2027. However, the market's reaction to the earnings was muted. “Nothing changes from what was expected before—just no hike,” said Ben Bajarin, CEO of Creative Strategies, after the June report. Ryan Lee, senior vice president of product and strategy at Direxion, added that “the market demands perfection.”
Hargreaves Lansdown's Matt Britzman attributed the June drop to “very high expectations” running into a market “that wanted perfection.” Bernstein's Stacy Rasgon suggested Broadcom could “take a pause,” but noted that 2027 could be the year to watch.
Competitive Landscape and Investor Sentiment
The Apple deal narrows a key risk for investors: losing a major non-AI client. However, the bigger challenge remains. Broadcom must prove its custom AI business can ramp up and compete with Nvidia Corp. (NASDAQ: NVDA) and Marvell Technology Inc. (NASDAQ: MRVL). Margins and supply chain issues remain in focus.
Wall Street futures traded higher ahead of the bell, lifted by gains in chip stocks, with S&P 500 and Nasdaq futures both in positive territory. The broader market is watching Broadcom's ability to execute on its AI strategy while maintaining its legacy business.
Dow Jones Newswires reported that the terms of the Apple extension were not disclosed.
