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Key Points
- Apple (AAPL) and Broadcom (AVGO) extended their long-standing partnership through 2031, with Broadcom set to develop custom ASIC semiconductors for future Apple devices.
- The agreement follows Broadcom’s 79% year-over-year growth in its Semiconductor Solutions segment, though investors sent the stock down 13% after the company’s latest results.
- The expanded partnership comes just months before Apple CEO Tim Cook is set to step down on September 1, when Senior Vice President of Hardware Engineering John Ternus will become CEO.
Two of the biggest companies on the stock market recently reaffirmed a key partnership…
Broadcom (AVGO) announced on July 6 that it extended its long-running partnership to produce semiconductors for Apple (AAPL) over the next five years. Broadcom’s application-specific integrated circuits (“ASICs”) have mostly handled networking tasks on Apple devices – like Wi-Fi, Bluetooth, and cellular 5G connections.
Analysts estimate that 20% of Broadcom’s sales every year are thanks to Apple.
If that’s the case, it means almost $13 billion of Broadcom’s 2025 revenue came from its partnership with Apple.
This renewal couldn’t have come at a better time for Broadcom’s stock…
On June 3, Broadcom reported second-quarter earnings.
The company beat its earnings per share (“EPS”) estimates of $2.40 by $0.04. And it reported a huge 79% year-over-year revenue increase in revenue from its Semiconductor Solutions segment.
However, Broadcom didn’t increase its outlook for next year’s semiconductor revenue. It held steady at an estimated $16 billion in sales of its AI chips.
Overall, the second-quarter report left investors hungry for more…
By the end of the next trading day, shares of Broadcom had plunged by about 13%. This marked one of the steepest one-day losses in Broadcom’s history.
Since then, Broadcom’s stock has traded mostly sideways.
News of its deal with Apple gave Broadcom’s share price a modest 4% boost. But the stock still sits far below its 52-week high of $495 per share…
Now, investors need to ask if Apple’s expanded deal changes Broadcom’s story. Will new investors in Broadcom be buying a stellar stock at a discount… or catching a falling knife?
New Leadership at Apple Boosts Broadcom’s Chance of Future Share Price Resurgence
Broadcom’s future share price may be dependent on Apple’s ability to create innovative new products.
And the chances of that happening are strong thanks to new leadership at Apple. On April 20, Apple’s current CEO Tim Cook announced he would be handing control of the company over to John Ternus on September 1.
Ternus isn’t a random name. He’s the senior vice president of Hardware Engineering at Apple. He led the teams that designed and built hit products like the Apple Watch and AirPods.
This move bodes well for Broadcom…
Any new device that Apple puts out means it will need more custom chips made by Broadcom. And any new Apple product that sells well means an influx of cash for Broadcom’s chip business.
But that doesn’t mean investors need to rush out and scoop up shares of Broadcom. In fact, the Power Gauge suggests that now may not be the best time to invest in the stock…
The Power Gauge is the culmination of 60-year Wall Street legend Marc Chaikin’s career. This one-of-a-kind rating tool predicts whether a stock is likely to outperform or underperform the broad market.
It does this by distilling 20 unique factors across four categories into one easy-to-understand rating. These factors are scored on a range from “very bullish” (very likely to outperform) to “very bearish” (very likely to underperform).
Right now, Broadcom gets a “neutral+” rating from the Power Gauge system.
This rating means Broadcom would normally be a “bullish” or better stock – but is experiencing temporary weakness.
Ordinarily, this would be a positive sign for bargain-hunting investors. But the Power Gauge’s “Pre-Trade Checklist” says it’s smart to wait…
Here, we see Broadcom’s stock could fall more than it already has.
But the “neutral+” Power Gauge rating shows that there is still plenty of strength “under the hood.” The stock just needs to ride out this wave of weakness.
Three things need to happen before investors should buy shares of Broadcom, however…
- The stock moving above its long-term trend line
- A sustained flow of Wall Street’s “smart money” into the stock
- The stock hitting “oversold” levels on the relative strength index (“RSI”)
The biggest question now is when all this will happen.
Broadcom’s Stock Outlook Is Tied to Apple’s Performance More Than Ever
Luckily for us, we can get some hints on Broadcom’s future movements from its past…
On December 11, 2025, Broadcom beat EPS estimates of $1.87 by $0.08. In similar fashion to what happened last month, the stock fell more than 11% the next day.
Broadcom’s stock tumbled until March 30 – when it closed at $293.41 per share. Following that trough, it rallied 64% up until the second-quarter earnings report I discussed above.
During that first period of weakness, Broadcom’s stock traded below its 200-day exponential moving average. And it underperformed the broad market S&P 500 Index.
At the same time, the Power Gauge also gave Broadcom a “neutral+” rating.
As you can see in the chart below, that’s also the exact setup for Broadcom’s stock right now…
If Broadcom surges like it did between April and June, investors would surely be thrilled. But the Power Gauge doesn’t see this happening anytime soon.
In short, Broadcom doesn’t look poised for massive growth in the near future. But the company’s renewed partnership with Apple could give the stock a much-needed boost over the long term.
Don’t forget that new leadership at Apple makes this an even more likely scenario. Investors should take another look at Broadcom’s stock if Apple releases a hot new product… or if Apple reports better-than-expected earnings.
Until then, it’s best to stay away.
Good investing,
Ethan Goldman
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