TLDR
- Broadcom surges 9% after $10B AI chip deal, reportedly with OpenAI.
- $10B AI chip order boosts Broadcom outlook, stock hits record high.
- Broadcom confirms major AI chip deal, raises 2026 revenue forecast.
- Stock soars as Broadcom lands $10B AI chip contract with OpenAI.
- Broadcom’s AI sales beat, $40B forecast drives stock to new highs.
Broadcom stock climbed 9.41% to close at $334.89 on September 5, 2025, after a strong Q3 earnings report. The surge followed confirmation of a $10 billion order for custom AI chips, reportedly from OpenAI. Broadcom stock maintained its momentum despite a minor 0.56% dip in after-hours trading.
Broadcom Secures $10B AI Chip Deal with OpenAI
Broadcom confirmed a significant new contract for its AI chip division, valued at over $10 billion, to ship in 2026. While CEO Hock Tan did not name the customer, reports identified OpenAI as the buyer behind the order. This contract will supply custom AI accelerators designed for OpenAI’s internal use.
The chips will support OpenAI’s infrastructure and reduce dependence on Nvidia’s GPUs, which have faced capacity shortages. As a result, Broadcom will expand its influence in the fast-growing custom accelerator market. These developments significantly lifted Broadcom stock and pushed its valuation higher.
Tan emphasized that this new client adds to an already strong portfolio of customers like Google, Meta, and ByteDance. The move accelerates Broadcom’s shift toward AI-specific processors tailored for inference workloads. With this deal, Broadcom expects sharper growth in 2026 and better revenue predictability.
AI Revenue Forecast Raised to $40B for 2026
Broadcom updated its 2026 outlook, projecting AI revenue to exceed $40 billion, up from an earlier $30 billion forecast. The company cited stronger demand from cloud platforms and increased adoption of custom chips. Broadcom stock reacted positively as analysts raised price targets in response to the bullish outlook.
Tan reported AI chip revenue for Q3 reached $5.2 billion, beating estimates and growing 63% year-over-year. Broadcom also guided for $6.2 billion in Q4 AI sales, up 66%, driven by demand from hyperscale data centers. These figures indicate robust growth in AI semiconductors and networking hardware.
Broadcom’s AI chip business now plays a central role in powering next-gen data centers. As customers pursue computing self-sufficiency, they increasingly shift workloads to custom-built solutions. Broadcom aims to lead this trend with scalable, purpose-built silicon tailored for AI.
Broadcom Stock Hits Record, Analysts Boost Price Targets
Broadcom stock rose sharply, adding over $135 billion in market value and briefly touching a record high of $356.24. Over 22 financial institutions raised their price targets, reflecting optimism about the company’s AI expansion. JP Morgan, Bernstein, and Piper Sandler reaffirmed “overweight” ratings, targeting up to $400.
Analysts praised Tan’s leadership and the company’s execution in scaling AI products across its growing customer base. Many said Broadcom is now better positioned to challenge Nvidia and lead in custom AI hardware. Melius Research called the earnings call one of the most bullish in recent tech history.
Tan will continue as CEO through at least 2030, reinforcing stability during a key growth phase. The extension removes uncertainty and supports Broadcom’s long-term vision. The announcement further strengthened Broadcom stock and underlined the company’s strategic commitment to AI innovation.
