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Tuesday's Exclusive Content
Broadcom & Meta Extend AI Pact Into 2029 as Shares Climb to $400By Leo Miller. First Published: 4/21/2026. 
Key Points
- Broadcom is back up from its lows, expanding several key AI partnerships along the way
- Broadcom received its latest AI expansion from Meta Platforms, with the companies set to collaborate on custom chips through 2029
- As Broadcom hits $400 again, its forward P/E ratio is down substantially, a positive sign going forward
- Special Report: Elon Musk’s $1 Quadrillion AI IPO
After falling more than 25% to below $300 per share, semiconductor giant Broadcom (NASDAQ: AVGO) has staged a sizable recovery. Now trading near $400, the stock is up more than 10% in 2026 and has rebounded more than 30% from its 2026 lows. In early April, Broadcom expanded its artificial intelligence (AI) chip partnerships with Google parent company Alphabet (NASDAQ: GOOGL) and Anthropic, jolting the stock. About a week later, Broadcom announced an expansion of its partnership with another massive customer: Meta Platforms (NASDAQ: META).
The Wall Street Journal is already raising the alarm about a potential market crash, and Weiss Ratings research points to the first half of 2026 as a particularly rough stretch for certain holdings.
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Importantly, as Broadcom returned to $400, its forward price-to-earnings (P/E) ratio fell markedly on higher expected earnings. That narrower valuation reduces the risk of a repeat of the late‑2025 to early‑2026 drawdown. Meta and Broadcom Work on 2nm AI Chips, Extend Partnership Through 2029With their latest announcement, Broadcom and Meta confirmed their business relationship will continue for years. The firms will collaborate on future generations of Meta’s custom AI chips over the next three years, extending their partnership through 2029. While the long-standing nature of the relationship was already expected, the announcement provides added visibility for Broadcom’s roadmap. Broadcom and Meta say they will roll out the world’s first two‑nanometer (2nm) AI accelerator — a notable technological milestone. Lower nanometer processes are often shorthand for "more advanced," indicating Meta and Broadcom are pursuing cutting‑edge AI hardware. That said, nanometer size is only one factor determining overall chip and system performance. Following the deal, Broadcom CEO Hock Tan will not run for re-election to Meta’s Board of Directors. Price Targets Hold Steady Amid Meta AnnouncementThe companies say their initial commitment exceeds one gigawatt (GW) and represents the first phase of a multi‑GW rollout, consistent with Broadcom’s comments on Meta during its last earnings call. Analysts use GW to describe the scale of data center deployments. A multi‑GW agreement with Meta has meaningful financial implications: Bernstein analyst Stacy Rasgon estimates Broadcom generates roughly $20 billion in revenue per GW. Broadcom and Meta’s partnership covers more than custom AI processors — it also includes networking components such as Ethernet switches, which route data and enable communication between processing chips. While Broadcom’s XPUs attract much attention, networking is a significant part of its AI business. Next quarter, Broadcom expects total AI revenue to rise 76% year over year (YOY) to $14.8 billion, with roughly 40% coming from networking — implying about $5.92 billion in networking sales. On the day of the announcement, Broadcom shares rose roughly 4.2%. MarketBeat has not tracked any Wall Street analysts updating their price targets since, likely because much of the release’s information was already anticipated. Still, the confirmation that Meta and Broadcom will remain partners through 2029 is a positive for Broadcom’s revenue visibility. Despite the lack of widespread analyst upgrades, Wall Street remains broadly bullish. The MarketBeat consensus price target for AVGO sits near $435, implying slightly less than 10% upside. Targets set after Broadcom’s most recent earnings report are notably higher — averaging roughly $489 and suggesting more than 20% upside — with updated targets ranging up to $545 and no lower than $450. Financials and Outlook Catch Up: Broadcom’s Forward P/E Falls Despite Return to $400Investors who remember the last time shares traded near $400 know that in early December 2025 Broadcom hit an all‑time high closing price of $411, then fell about 29% through late March. Given that recent history, it's understandable investors might feel cautious now that AVGO is back near the same level. There is, however, a key difference between $400 today and $400 in December 2025: the stock’s forward P/E. Back in December, the forward P/E was roughly 47x–49x; today it is around 30x. That change reflects improved financials and a stronger outlook. The stock now trades at a similar price but with higher expected earnings, driving the forward P/E down by more than 30%. In short, Broadcom’s current price is more supported by near‑term fundamentals, making a repeat of the post‑December decline less likely. The current ~30x forward P/E is only slightly above the company’s three‑year average of about 29x. |
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