Shares of Broadcom Inc (NASDAQ:AVGO) continued to climb after the company on Tuesday announced a strategic partnership with Meta Platforms Inc (NASDAQ:META) to support the development and supply chain fulfillment of the MTIA (Meta Training and Inference Accelerator) compute chips through 2029.

The latest deal "further reinforces Broadcom’s technology advantage in custom silicon and AI networking," according to Goldman Sachs.

The Broadcom Analyst: Analyst James Schneider maintained a Buy rating and price target of $480.

The Broadcom Thesis: The partnership with Meta exceeds 1GW (gigawatt). It is also “the first phase of a sustained, multi-gigawatt rollout between the two companies," Schneider said.

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The Meta deal is not limited to hardware supply. It involves "collaboration on system-level optimization and forward-looking R&D efforts," the analyst stated.

Broadcom’s CEO Hock Tan will take on an advisory role to provide guidance on Meta’s custom silicon roadmap, he added.

The deal with Meta comes on the heels of Broadcom's agreement with Alphabet Inc's (NASDAQ:GOOG) Google and AI safety and research startup Anthropic, announced last week.

The Meta deal further highlights Broadcom’s "increasing traction with its XPU platform and networking solutions across major US hyperscalers," the analyst wrote.

He added that the recent deals broaden and diversify the company's customer base, as Google and Anthropic provide exposure to enterprise customers, while Google and Meta provide exposure to consumer AI applications.

According to Schneider, Broadcom’s stock, over the next 12 months, hinges on:

  • Multi-year partnerships driving the XPU platform's traction across major US hyperscalers
  • The company's industry-leading networking capabilities
  • Upside to estimates

He noted that Goldman's estimates for fiscal 2027 and 2028 are currently around 14% higher than Street expectations.

AVGO Price Action: Shares of Broadcom had risen by 3.06% to $392.36 at the time of publication on Wednesday.

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