Broadcom Inc (NASDAQ:AVGO) Shares Surge

Broadcom Inc (NASDAQ:AVGO) shares rose over 5% before the opening bell on Wednesday following reports that Apple Inc (NASDAQ:AAPL) is collaborating with the chipmaker to develop its first AI-tailored server chip.

According to The Information, which cited sources familiar with the situation, Broadcom is working with Apple to provide essential networking technology for AI processing.

Traditionally, Broadcom sells chips directly to customers instead of licensing its intellectual property. However, it is offering a more limited range of design services to Apple while continuing to supply its networking technology, as noted by one of the sources.

The chip, code-named "Baltra," is expected to enter mass production by 2026. If the project is successful, it will mark a significant milestone for Apple's silicon team and bolster the company’s push into AI-driven hardware.