Why Broadcom Stock Climbed Today

Shares of Broadcom (NASDAQ: AVGO) rose on Wednesday after the semiconductor colossus struck a deal to supply Meta Platforms (NASDAQ: META) with artificial intelligence (AI) technology.

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Broadcom and Meta are working together to create the infrastructure needed to bring advanced generative AI capabilities to the social media titan’s 3.6 billion customers. The two companies will co-design custom AI accelerator chips to help power Meta’s herculean AI model training and inference efforts.

The chips that will underpin Meta’s cutting-edge AI data centers will be built on Broadcom’s XPU platform. Their custom design aims to blend performance with a lower total cost of ownership compared to less specialized chips.