Broadcom share price on open AI Deals

If you’ve watched semiconductor stocks, you’ll know the market loves a good AI story. But the past few weeks with Broadcom have felt different to me—there’s energy, rapid movement, and, honestly, a sense of anticipation. Broadcom’s latest deals, especially with OpenAI, didn’t just make headlines—they changed the day-to-day context for investors, engineers, and industry insiders. Suddenly, that usual stock chart looks more like a mountain range than a slow incline.

The OpenAI Deal: What’s Really Happening?

Let’s get into the heart of it. Broadcom secured a landmark $10 billion order from a new customer, widely believed—almost confirmed by major analysts—to be OpenAI. The order is for custom AI accelerator chips (XPUs). This partnership didn’t materialize out of thin air; it follows a year of collaboration rumors and recent confirmation from the Financial Times and Reuters. OpenAI, seeking to reduce its dependence on Nvidia’s powerful GPUs, locked in Broadcom’s design and manufacturing capabilities for chips dedicated to core AI workloads—like those powering ChatGPT.

What’s cool here? OpenAI doesn’t plan to sell these chips outside; they’ll use them in-house, aiming for speed, efficiency, and lower long-term costs. It’s widely seen as the next big step for generative AI scaling. Everybody’s watching.

Share Price Impact & Analyst Upgrades

Once news dropped, Broadcom’s shares jumped over 15% in a single day. Pre-market, post-market, normal hours—it didn’t much matter. The optimism was contagious. Since then, price targets from BofA Securities, JPMorgan, Barclays, and KeyBanc shot up to $400 (from previous benchmarks hovering around $265–$300).

The stock went from a heavy-hitter to a market darling almost overnight. Market cap soared past $1.44 trillion, shrugging off broader tech sector jitters.

Comparing Broadcom to Its Rivals

People always want to know: Is Broadcom on Nvidia’s level now? Kind of. Nvidia still commands the CUDA fortress; its GPUs are favored for many AI applications because of software compatibility and hardware connectivity (NVLink). But Broadcom has three solid AI partners—Google, Meta, ByteDance—and now, OpenAI. Each of these has contributed to Broadcom grabbing market share from 11% now and possibly doubling to 24% in the next few years if the growth keeps up.

Competition in AI chips is heating up. With the Ultra Accelerator Link project (a direct answer to NVLink) involving Google, Meta, AMD, and Broadcom, there’s a chance for a real shakeup in the interconnect sphere too.

Real Investor Anecdotes

I chatted with Rohan, a retail investor who’s followed tech stocks for a decade. He locked in Broadcom calls about a month before the OpenAI news dropped: “Frankly, I thought growth would slow, but these deals show just how rapidly AI adoption is scaling up.” Last Friday, he messaged me in surprise: “That 15% jump wasn’t a fluke—looks like we’re onto something big.”

Industry analysts, not just retail investors, are echoing similar excitement. Listening in on a recent earnings call, I heard portfolio managers asking about ‘additional hyperscale deals’—a sign that Wall Street expects more headlines soon.

Financial Performance Breakdown

Broadcom’s Q3 2025 numbers prove momentum isn’t hype. The company posted:

• Earnings per share: $1.69 (beating consensus)
• Revenue: $16 billion, outpacing forecasts
• AI-driven revenue for the quarter alone: $5.2 billion, up 63% year-over-year

For Q4, the forecast is ~$17.4 billion, about 24% YoY growth. And with the OpenAI contract, AI revenue is expected to hit $6.2 billion in Q4, accelerating through 2026. Expanded margins (77%) and modest expense growth (just 5–8%), mean much of this extra cash will go toward debt reduction or shareholder returns.

What’s Next for Broadcom?

With the cash flow from this deal, Broadcom’s not just resting on its laurels. R&D is ramping up, aimed squarely at next-gen AI accelerators and connectivity. Operating expenses are only creeping up, so any additional earnings give Broadcom stellar leverage.

Long-term? If OpenAI chips work as intended, Broadcom’s expected AI revenue could climb toward $100 billion by 2027—which might make today’s record share price feel like just the beginning.

FAQs on Broadcom’s AI Deals

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