Broadcom Inc Hits 52 Week High on Multi-billion Apple Deal
Apple Inc. (AAPL:US) signed a new multi-billion, multi-year agreement with Broadcom (AVGO:US) on Tuesday in a move that is intended to boost local manufacturing in the U.S. The deal is related to 5G equipment that Apple intends to buy locally in the U.S.
The investment is part of Apple’s 2021 plans when it promised to invest $430 billion in the U.S. over a period of 5 years.
"We’ll continue to deepen our investments in the U.S. economy because we have an unshakable belief in America’s future," Apple CEO Tim Cook said.
The deal helps Broadcom plan for a future where its two major customers, China and Apple, may no longer be in the picture for various reasons. China is an unpredictable market for chip makers now, especially after the recent Chinese ban on Micron. Apple, on the other hand, is looking to phase out Broadcom by 2025 and make its chips in-house.
The exact impact of the deal is hard to work out, as it will depend on Apple’s sales numbers. But doing business with Apple is generally considered an endorsement of the quality of your products. The market responded positively to the news with Broadcom hitting a new 52-week high during trading hours.
Daniel Goldman and Tommy Tuberville stand out as the two politicians set to benefit from the announcement having already bought AVGO shares at attractive prices earlier in the year.