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6d ago

Broadcom Surges on $10 Billion AI Accelerator Orders and Higher Outlook

Reports link the buyer to OpenAI with initial shipments expected in 2026, signaling a shift toward bespoke chips beyond Nvidia’s GPUs.

Nvidia's CEO, Jensen Huang, with a Grace Hopper AI superchip platform.
Broadcom Inc. headquarters in San Jose.
Broadcom is now making AI chips for 4 major companies.
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Overview

  • Broadcom reported fiscal Q3 revenue of $15.95 billion with AI sales up 63% year over year to $5.2 billion and guided Q4 revenue to $17.4 billion, including $6.2 billion from AI semiconductors.
  • CEO Hock Tan said a prospect has become a qualified customer and placed production orders, securing over $10 billion of AI rack orders based on Broadcom’s custom XPUs.
  • Multiple outlets and analysts identify OpenAI as the likely undisclosed customer and describe a Broadcom–OpenAI co‑design for internal inference chips, though neither company has formally confirmed details.
  • Shares of Broadcom jumped roughly 10%–16% as Wall Street raised price targets, while Nvidia and AMD slipped on concerns about rising custom‑chip competition.
  • Management said the new orders point to significantly stronger AI revenue growth in fiscal 2026, though volumes, schedules, and technical specifications remain unverified.