In a move that surprised some investors and analysts, Apple (NASDAQ: AAPL) signed a new multi-billion deal with Broadcom (NASDAQ: AVGO), which will drive the development of components related to 5G radio frequencies. The announcement sent Broadcom stock higher as the relationship between the two companies expanded.

Of course, this semiconductor stock was already on the rise before the announcement, so the added news now has the stock trading at record highs. Given its already elevated stock price, does this latest deal make Broadcom a buy, or did investors miss their opportunity?

Broadcom's chip segment develops semiconductors for other companies. It invests billions per year in research and development, and it employs engineers near its large clients to develop solutions collaboratively. One fan of its approach is Apple, which was an important Broadcom client before this deal. Broadcom designs the chips that power the Wi-Fi hotspot for the iPhone and other products, and this relationship accounted for about 20% of Broadcom's revenue in 2022.

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Source Fool.com