Broadcom Soars 6% After Hours — OpenAI’s $10 Billion Order Finally Revealed

TradingKey - Semiconductor giant Broadcom (AVGO.US) surged nearly 6% in after-hours trading on Thursday, extending its strong year-to-date performance. The rally followed a better-than-expected earnings report and the revelation of a major new customer: OpenAI, the developer of ChatGPT.

On the financial front, Broadcom delivered a strong third-quarter result:

• Revenue of $15.95 billion, up 22% year-over-year, slightly exceeding expectations.
• Adjusted EPS of $1.69, above analyst forecasts.

Even more encouraging, the company guided Q4 revenue to $17.4 billion, significantly above the consensus of $17.0 billion, reinforcing confidence in its growth trajectory.

But the real catalyst came from the AI front. During the earnings call, CEO Hock Tan announced that the company has secured a fourth major customer for its custom AI chips, with a commitment exceeding $10 billion.

While the customer was not officially named, the Financial Times reported it is OpenAI. Tan confirmed the client will begin “very strong shipments” starting next year, driving Broadcom’s AI-related revenue to an expected $6.2 billion this quarter — marking 11 consecutive quarters of AI revenue growth.

This partnership signals OpenAI’s formal entry into the growing trend of tech giants building their own AI chips. To overcome computing bottlenecks and reduce reliance on NVIDIA, OpenAI is collaborating with Broadcom to design its first in-house AI chip, codenamed the “XPU.” Mass production is expected to begin next year. The chip will be used internally to power OpenAI’s large-scale AI training and inference workloads — not sold commercially — mirroring similar strategies by Google (TPU) and Amazon (Trainium).

With deep experience in custom silicon — including Google’s TPU — Broadcom has once again positioned itself at the heart of the AI hardware revolution. This collaboration not only validates its technological leadership but also strengthens its strategic role in the AI infrastructure race.

Market analysts say the combination of strong earnings and the confirmation of a $10+ billion OpenAI order solidifies Broadcom’s status as a core AI enabler. Investor confidence in its leadership in the AI era has deepened — and the stock’s rally reflects that conviction.