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This Week's Exclusive Article
Broadcom & Meta Extend AI Pact Into 2029 as Shares Climb to $400Reported by Leo Miller. 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: This Could Turn $100 into $100,000
After falling more than 25% to under $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 major customer: Meta Platforms (NASDAQ: META).
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Importantly, amid these developments and Broadcom’s move back toward $400, the stock’s forward price-to-earnings (P/E) ratio has declined significantly as analysts lifted forward earnings estimates. That reduces the risk of a repeat of the late-2025 to early-2026 sell-off. Meta and Broadcom Work on 2nm AI Chips, Extend Partnership Through 2029With their latest announcement, Broadcom and Meta confirmed their long-running business relationship will continue for years. The firms will collaborate on future generations of Meta’s custom AI chips over the next three years, effectively extending their partnership through 2029. While the continuation of the relationship wasn’t unexpected, the announcement gives Broadcom greater visibility into future demand. Broadcom and Meta say they will roll out the world’s first two-nanometer (2nm) AI accelerator — a notable technological milestone. Low-nanometer processes are often shorthand for “more advanced,” indicating work at the cutting edge of AI hardware. Nanometers, however, are only one factor in overall chip and system performance. In connection with 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 gigawatts to describe the scale of data center deployments, and a multi-GW commitment from Meta has meaningful financial implications for Broadcom. Bernstein analyst Stacy Rasgon estimates Broadcom generates roughly $20 billion in revenue per GW. Notably, the partnership covers more than custom AI processors; it also includes networking components such as Ethernet switches, which route data and enable processors to communicate. While Broadcom’s XPUs attract most attention, networking is a significant portion of the company’s AI business. Next quarter, Broadcom expects total AI revenue to rise 76% year over year (YOY) to $14.8 billion, with about 40% — roughly $5.92 billion — coming from networking. On the day of the announcement, Broadcom shares climbed roughly 4.2%. MarketBeat has not tracked any Wall Street analysts updating their price targets since then, as much of the information in the release had already been anticipated. Still, the confirmation that Meta and Broadcom’s relationship extends through 2029 is a constructive sign. Wall Street remains broadly bullish on Broadcom. The MarketBeat consensus price target for AVGO sits near $435, implying a bit less than 10% upside. Price targets published after Broadcom’s most recent earnings report are more optimistic — averaging about $489, which implies more than 20% upside. Those updated targets range from $450 to $545. Financials and Outlook Catch Up: Broadcom’s Forward P/E Falls Despite Return to $400Investors who remember Broadcom trading near $400 in early December 2025 should also recall the subsequent drop: the stock hit an all-time closing high of $411 and then fell about 29% through late March. Given that history, renewed trading near $400 can understandably make investors wary. There is, however, a meaningful difference between Broadcom at $400 today and at $400 in December 2025. Back then, the forward P/E hovered around 47x–49x; today, AVGO’s forward P/E is closer to 30x. That shift reflects material improvements in Broadcom’s financials and outlook over the intervening months. The stock now trades near the same price but with higher expected earnings, which has driven the forward P/E down by more than 30%. Put differently, today’s $400 share price is better supported by near-term earnings expectations, making a repeat of the dramatic post-December decline less likely. Broadcom’s current ~30x forward P/E is only slightly above its three-year average of about 29x. |
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