Broadcom Stock Jumps On Apple AI Chip Collaboration Reports: Retail Eyes New Highs

Broadcom Inc. shares jumped over 5% in midday trading on Wednesday after reports surfaced that Apple Inc. is collaborating with the chipmaker to design its first artificial intelligence (AI) chip, codenamed Baltra. 

Apple shares also edged higher, rising 0.6%.

The Information, citing sources, reported that the Baltra chip is set to handle AI-specific tasks, such as processing data and interacting with large language models (LLMs). 

The chip is expected to be ready for mass production by 2026, signaling Apple's deepening foray into AI-powered hardware.

It should be noted that Apple had signed a multi-billion-dollar deal with Broadcom to develop 5G radio frequency components, though the exact amount was not disclosed, last year.  

In addition to looping Broadcom into the project, Apple plans to use one of Taiwan Semiconductor Manufacturing Co’s (TSMC) manufacturing processes called N3P.

Apple, Broadcom, and TSMC have not yet commented on the report.

This move reflects Apple’s strategy to reduce reliance on third-party semiconductor vendors, such as Nvidia and Qualcomm, as it seeks to develop proprietary chips for compute-heavy AI tasks.

The AI-focused chip could enable advanced features across Apple’s ecosystem, including Siri and other AI-driven applications.

Broadcom Sentiment and Message Volume on Dec 11 as of 12:45 p.m. ET | Source: Stocktwits

Retail sentiment around Broadcom remained in the ‘bullish’ (74/100) territory as chatter rocketed to ‘extremely high’ levels.

The news comes right before the chip-maker is slated to report its fourth-quarter earnings after the bell on Thursday. 

Users on Stocktwits expect the share price to surge further, potentially hitting all-time highs, once the results are announced.

Broadcom’s shares are up 66% so far this year, but are dwarfed by Nvidia’s gains of over 187% year-to-date. The returns, however, are better than the broader sector performance of 17% during the same period.

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Read also: Broadcom Shares Slide as Nvidia’s Woes Drag Semiconductor Stocks Lower: Retail Bets on Strong Earnings