Broadcom secures extended Apple contract through 2031, locking in multi-year networking and custom silicon shipments to iPhone/data-center customer.
Broadcom and Apple both posted strong quarters, but the more compelling story lies in their evolving relationship: Broadcom's newly finalized custom silicon extension with Apple runs through 2031, hard-wiring roughly 20% of Broadcom's annual sales to the world's largest device maker. That single contract reframes how these two NASDAQ names compare.
Broadcom's Q2 FY2026 delivered $22.19 billion in revenue, up 47.9% year-over-year, with AI semiconductor revenue of $10.80 billion, growing 143%. CEO Hock Tan called demand "simply insatiable" and guided Q3 AI revenue to $16 billion, representing over 200% growth. Custom accelerator work for Google, Meta, OpenAI, and Anthropic powers this momentum, with Apple's radio-frequency franchise providing a stable baseline underneath.
By comparison, Apple printed its best March quarter on record: $111.18 billion in revenue, up 16.6%, with iPhone at $56.99 billion and Services hitting an all-time high of $30.98 billion. CEO Tim Cook credited "extraordinary demand for the iPhone 17 lineup"—solid results, but pedestrian alongside Broadcom's trajectory.
The strategic divergence is sharp. Broadcom sells custom XPUs and networking silicon into hyperscaler buildouts while collecting a decade of Apple wireless royalties. Apple cannot cleanly replicate Broadcom's radio-frequency and wireless architecture in-house, which is precisely why the 2031 extension matters. Apple defends device margins against component cost inflation and skyrocketing foundry and memory pricing, while leaning on Services to cushion the ride.
Valuation underscores the split. Broadcom trades at a forward P/E of 20 against a PEG of 0.4. Apple sits at a forward P/E of 32 with a PEG of 2.5—you pay a significant premium for slower growth in Cupertino.
Broadcom targets AI semiconductor revenue "in excess of $100 billion" in 2027, with over $30 billion in Q2 AI bookings already backing that trajectory. For Apple, the swing factor is whether Apple Intelligence and the rumored foldable iPhone offset foundry inflation before Services growth cools.
Broadcom appears better positioned on the metrics. The Apple lock-in through 2031 eliminates the largest bear case, the hyperscaler order book is visible into 2028, and you pay a cheaper multiple for faster growth. Risks remain: co-founder Henry Samueli dumped hundreds of thousands of shares on June 24 in the $377 to $388 range, a notable insider caution signal, and semiconductor cyclicality persists. For structural AI exposure with a locked-in consumer electronics annuity, Broadcom is the cleaner vehicle.