Apple just announced a multi-billion-dollar deal with Broadcom

Broadcom Inc (NASDAQ: AVGO) is in focus this morning after Apple Inc (NASDAQ: AAPL) announced a multi-year, multi-billion-dollar agreement with the chipmaker.

Details of the Apple-Broadcom deal

Last night, the iPhone maker announced a deal with Broadcom to make 5G radio frequency components, including FBAR filters, in the United States.

In 2021, Apple had pledged $430 billion to the U.S. economy through 2026. This agreement with Broadcom, it confirmed in a press release today, was a part of that commitment.

Broadcom is scheduled to report its Q2 financial results next week. Consensus is for it to earn $9.35 a share this quarter versus $8.39 per share a year ago.

Should you buy Broadcom stock?

The said components will be built in several cities, including Fort Collins where Apple already supports over 1,100 jobs at a Broadcom facility.

Year-to-date, Broadcom stock is up nearly 25%. Explaining what this agreement means for its share price moving forward, CFRA Research senior equity analyst Angelo Zino said today on CNBC’s “Squawk Box”:

Zino currently has a “buy” rating on the chip stock. His $750 price target on its suggests about a 10% upside from here.