Apple CEO Tim Cook Just Delivered Incredible News for Broadcom Investors

Key Points

• Apple recently pledged $100 billion to onshore manufacturing efforts, bringing its total commitments to $600 billion.

• Apple CEO cited Broadcom as a key partner to help build Apple's communications devices.

• Between its relationships with Apple and the hyperscalers, Broadcom is uniquely positioned to benefit from the rise of consumer-driven and enterprise-facing artificial intelligence (AI) applications.

• 10 stocks we like better than Broadcom ›

Earlier this month, Apple CEO Tim Cook joined President Trump and senior Cabinet members in the Oval Office to announce the company's plan to invest $100 billion into U.S. manufacturing over the next four years. This comes on top of Apple's previously unveiled $500 billion domestic infrastructure commitment.

Apple's ramped-up infrastructure efforts have clear implications for Broadcom's (NASDAQ: AVGO) long-term growth trajectory. As Apple expands its U.S. footprint, Broadcom stands to benefit not only from increased demand for chips but also from its emerging role in powering next-generation networking, connectivity, and artificial intelligence (AI) applications.

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Let's break down why Apple's continued investment in infrastructure strengthens Broadcom's strategic position, and how it accelerates the company's ambitions in AI and beyond.

Broadcom has deep inroads with hyperscalers

While Apple may be one of Broadcom's most visible partners, the company has also been quietly building deep ties with AI hyperscalers -- Alphabet being a notable one.

Broadcom's portfolio spans custom silicon, networking switches, and optical interconnects -- the foundational layers that power modern data centers. These may not be headline-grabbing products, but they serve as the invisible scaffolding that enables AI models to train at scale and keeps data workloads flowing smoothly -- avoiding costly compute and connectivity bottlenecks.

What makes Apple's reliance on Broadcom so compelling is how it bridges two high-growth landscapes: consumer electronics (i.e., semiconductor components for the iPhone) and enterprise-grade AI infrastructure. Broadcom's established relationships with hyperscalers validate its role as a provider of specialized, mission-critical technologies. Meanwhile, Apple's endorsement amplifies that credibility -- signaling to the broader AI ecosystem that Broadcom is a trusted partner.

In essence, Broadcom is solidifying its influence across the entire technology stack -- from chips inside of consumer devices to the infrastructure driving next-generation AI applications inside hyperscale data centers.

Image source: Getty Images.

Broadcom is a quiet beneficiary of rising AI infrastructure investment

The explosion of AI workloads has only heightened the need for networking gear and the specialized chips that enable big tech to operate at scale. While Broadcom dominates many of these use cases, it rarely commands the same spotlight as Nvidia, Advanced Micro Devices, and Taiwan Semiconductor Manufacturing.

The reason is straightforward: Broadcom isn't building GPUs that capture headlines. Rather, the company designs the connective tissue that allows GPUs, CPUs, and memory chips to communicate efficiently. Without Broadcom's technologies, generative AI advancements would remain throttled by data transfer limits and networking bottlenecks.

Is Broadcom stock a buy right now?

While Broadcom lacks the same levels of excitement that have crowned peers like Nvidia as an "AI darling," this hasn't translated into a bargain stock price. On the contrary, Broadcom now trades at a forward price-to-earnings (P/E) multiple of 45 -- well above its three-year average and essentially at the highest point of the current AI cycle.

AVGO PE Ratio (Forward) data by YCharts

Broadcom's premium valuation tells a clear story: The market increasingly views the company as a structural beneficiary of ongoing AI buildouts. Although expectations remain high, Broadcom's relationships with hyperscalers, as well as its alliance with communications leaders such as Apple help diversify the company's ecosystem and drive home its broad depth across various applications and use cases.

Unlike Nvidia or AMD, Broadcom does not need to rely on generational product cycles to capture the attention of investors. Instead, the company's appeal lies in its subtle, less-visible services that keep the digital economy humming along.

This quiet, indispensable nature makes Broadcom less vulnerable to hype-driven volatility while still offering meaningful upside given its exposure to myriad secular trends reshaping the technology landscape.

While the stock isn't cheap, Broadcom represents a durable infrastructure play as the AI narrative continues to unfold. To me, Broadcom is a compelling opportunity to buy and hold over the long term.

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Adam Spatacco has positions in Alphabet, Apple, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.