Evercore Reiterates Outperform on Apple, $365 PT

Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and $365 price target on Apple (NASDAQ: AAPL).

“Apple announced a new multi-year commitment with Broadcom to design and produce custom silicon components and wireless connectivity technologies.

The agreement is expected to exceed $30B and result in the production of more than 15B U.S. made chips, including a $1.5B capex investment from Apple to expand and modernize Broadcom’s Colorado facility, where Broadcom will produce RF, FBAR filters and wireless connectivity components.

Bloomberg also reported that the expanded agreement with Apple runs through CY31 and includes ASIC silicon for multiple generations of Apple products.

We believe this is a part of a broader push from Apple to improve its AI compute silicon for future Apple Intelligence upgrades/enhancements.

Notably, with recent product launches, Apple has moved more aggressively to in-house its connectivity silicon, including its N1 chip for Wi-Fi and Bluetooth, along with continued work in its own modem roadmap.

That said, Broadcom appears to be a key supplier for Apple’s other comms components, and today’s new commitment suggests Apple still sees value in a LT partnership around RF + wireless connectivity, along with potential custom ASIC development which we believe is an under the radar move that Apple did not explicitly mention in its press release.

With $1.5B of committed capex investments + >$30B committed through CY31, we believe Apple is focusing on controlling more of its hardware stack, whether it be through its own in-house sourcing or through LT partnerships with suppliers, especially given the elevated constraints we’re seeing across DRAM/NAND.

Net/Net: We view today’s announcement as strategically positive, as it underscores Apple’s focus on securing critical connectivity and custom silicon capacity while also maintaining greater control over key components through the end of the decade.

We think the agreement is another example of Apple proactively locking up strategic parts of the BOM at a time when broader component availability and cost inflation remain a concern.

Maintaining our OP and $365 target.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.