Broadcom Secures $10B AI Chip Deal, Potentially with OpenAI, Boosting Stock by 9%

Broadcom Inc. (AVGO) shares surged 9% following the announcement of a $10 billion AI chip order, with industry reports pointing to OpenAI as the likely buyer. The deal marks a strategic shift toward custom semiconductors, offering an alternative to Nvidia's high-cost processors. Shipments are slated to begin in 2026.

The agreement is projected to elevate Broadcom's AI revenue to over $40 billion by fiscal 2026. Q3 results already showed robust performance, with total revenue reaching $15.95 billion and AI sales jumping 63% to $5.2 billion. The company forecasts Q4 revenue of $17.4 billion, exceeding Wall Street expectations, with AI chip sales anticipated to grow 66% year-over-year to $6.2 billion.

Rival AMD (AMD) saw shares drop 6% on the news, underscoring Broadcom's growing dominance in the AI hardware space. The deal signals accelerating institutional adoption of specialized AI infrastructure.