Why Did AVGO Stock Jump Over 3% In After-Hours Trading Today?

• AVGO and META stocks jumped in Tuesday’s after-hours session.
• As part of the deal, Broadcom CEO Hock Tan will step down from Meta’s board.
• AVGO has rallied strongly this month, fueled by a recent chip deal with Google.

Broadcom shares gained 3.2% in after-hours trading on Tuesday, extending a hot six-session winning streak, after the chipmaker announced an extension of its deal with Meta Platforms.

Broadcom will produce Meta’s AI chips, the Meta Training and Inference Accelerator (MTIA), through 2029. The chips will serve as the foundation of Meta’s AI data centers. The expanded deal includes an initial commitment of over 1 gigawatt of computing ​capacity. 

Additionally, Broadcom CEO Hock Tan will leave Meta’s board of directors and become an advisor, guiding the social media giant on its custom silicon roadmap and future infrastructure investments.

Meta shares rose 0.5% after hours on Tuesday.

Broadcom Rides Mega Deals Momentum

The development is part of a growing trend in which major technology companies such as Meta, Google, and Amazon are designing their own chips to reduce their reliance on Nvidia's costly processors.

The Meta deal comes on the heels of Broadcom's expansion of its partnership with Google. Broadcom said on April 6 that it would produce Google’s Tensor Processing Units (TPUs), along with networking and other components for Google’s next-generation AI data center racks, through 2031.

As part of the Google-Broadcom deal, Anthropic would lease 3.5 gigawatts of TPU-based computing capacity beginning in 2027.

Goldman Sachs said at the time that Broadcom’s growing and increasingly diverse exposure to key customers with leading AI models positions it as a key beneficiary of AI.

Amid deal momentum, Broadcom shares have rallied about 30% since a recent low on March 30; they have risen in eight of the last nine trading sessions.

Retail View On AVGO Consistently Bullish

On Stocktwits, the retail sentiment for AVGO was ‘extremely bullish,’ unchanged since the start of last week, as several traders took note of the back-to-back mega deals.

Technical traders are closely monitoring a massive breakout from a long-term descending triangle pattern as the stock tests crucial $400 resistance levels.

“$AVGO Man what a week for us Broadcom bulls! Rising from the ashes, we are now in sight to get over the $400 hump. What a wild ride. I almost bailed when we dipped below $300, but I believe Hock Tan will deliver us to the Promised Land! $415+ coming soon!” said a trader. 

With the recent surge, Broadcom shares are now up 10.2% year-to-date.

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