Broadcom Extends Apple Supply Deal to 2031, Eyes $200B OpenAI AI Chip Opportunity
AVGO•Broadcom secured an extension of its Apple chip supply agreement through 2031, underpinning revenue visibility in its largest client segment. Its Jalapeño AI chip deal with OpenAI, targeting a 10-gigawatt deployment and a potential $200 billion revenue stream beginning in 2027, arrives as valuation trades at 62× P/E.
1. Apple Supply Deal Extended Through 2031
Broadcom reached a binding agreement to keep supplying custom application processors and connectivity chips to Apple through December 2031, locking in design wins for iPhone and iPad product lines and securing predictable revenue streams in its largest end market.
2. OpenAI Partnership Targets $200B AI Chip Opportunity
Its collaboration with OpenAI focuses on the Jalapeño AI accelerator, with plans to deploy 10 gigawatts of compute infrastructure globally; the deal could support up to $200 billion in chipset sales once production ramps, with volume shipments anticipated to begin in 2027.
3. Valuation Falls to 62× P/E Below Three-Year Average
Following the partnership announcements, Broadcom’s forward P/E ratio has contracted to 62× on 2026 earnings estimates, well below its three-year average of 80×, indicating market skepticism but offering potential upside if AI and Apple revenue drivers materialize.
