Shares of Broadcom (NASDAQ:AVGO | AVGO Price Prediction) are up 6% to $381 in early Monday trading after the company said it agreed to expand its custom-chip partnership with Apple (NASDAQ:AAPL) through 2031. The news is fueling a broad semiconductor rebound after last week’s pullback.
Advanced Micro Devices (NASDAQ:AMD) stock is up 10% to $568, and Intel (NASDAQ:INTC) stock is up 5% to $126. The iShares Semiconductor ETF (NASDAQ:SOXX), which tracks a basket of chip names, is trading higher alongside the group.
The rally follows a rough stretch for Broadcom, which entered Monday down 25% over the prior month. Today’s session is resetting the tone for chip investors after a volatile close to June.
Broadened Apple Deal Anchors the Rally
Broadcom stated on Monday it will develop and supply custom chips for Apple through 2031, extending a relationship that already spans Wi-Fi, Bluetooth, and cellular radio-frequency components. Apple accounts for 20% of Broadcom’s annual revenue, making it one of Broadcom’s largest customers.
The extension locks in a long-duration revenue stream and eases worries that Apple could design Broadcom out of its silicon roadmap. It also reinforces Apple’s strategy of nailing down multi-year chip supply as its silicon footprint expands.
The catalyst lands after Broadcom’s Q2 FY2026 report, which showed revenue of $22.19 billion, up 47.9% year over year (YoY), with AI semiconductor revenue of $10.8 billion. CEO Hock Tan stated on the call, “The momentum continues and in Q3 we expect semiconductor revenue from AI to grow over 200 percent year-over-year to $16.0 billion.”
AMD Rebounds on Analyst Target Hikes
AMD stock is rebounding with the group after a soft prior week, supported by recent bullish analyst moves. On June 30, Wells Fargo raised its AMD price target to $615 from $505 at Overweight, citing strong EPYC server-CPU demand. A day earlier, Cantor Fitzgerald lifted its target to $700 from $500, calling the AI buildout a generational cycle.
AMD stock is up 153% year to date (YTD), reflecting powerful momentum tied to the MI450 accelerator ramp and record data center revenue. Yet, the average Street target of $518 sits slightly below the current share price, so consensus sees limited near-term upside from here.
That’s the balance for AMD holders. The bull case rests on durable AI infrastructure demand, while the cautionary point is that the stock has already priced in a lot of the good news.
Intel Rides the Sector Tape
Intel stock is rising mostly on sector sympathy, with a tangential boost from reports that Apple is in discussions with Intel to manufacture some chips in the U.S. Analysts caution that volume production is unlikely before late 2027, so the impact for now is more about narrative than near-term revenue.
Intel stock’s 238% YTD run has been driven by early foundry traction and new partnerships, including its selection as host CPU for NVIDIA‘s (NASDAQ:NVDA) DGX Rubin platform. The move today caps a strong recovery arc for a name that spent years in the penalty box.
Sector Backdrop and Bull-Bear Setup
The SOXX ETF is up 88% YTD, underscoring how much AI-driven demand has reshaped chip sector returns. Chip stocks and sector ETFs remain volatile, however, and last week’s slide is a reminder that pullbacks can be sharp.
The bull case rests on the confirmed Apple deal, sustained AI capex from hyperscalers, and rising custom-silicon budgets. The bear case is straightforward: valuations are stretched after enormous runs, with Broadcom carrying a trailing P/E ratio of 60x and AMD stock sitting above its consensus target. Investors may want to size their positions modestly given the volatility.
What to Watch Next
Investors can watch for whether Broadcom stock holds today’s gains into the close and whether Apple offers any follow-through commentary on chip sourcing. Any confirmation of the Intel foundry conversation would add fuel, though the timeline is long.
Momentum in AI names like Broadcom and AMD may keep the group active through the afternoon. The next scheduled catalyst for Broadcom is earnings season across the semiconductor complex later this month.
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