Broadcom Inc. (AVGO) shares surged over 9% following a significant $10 billion order for AI chips, with speculation linking the buyer to OpenAI. This development negatively impacted competitor AMD (AMD), whose shares dropped more than 6%. The order marks a strategic move for Broadcom into custom semiconductors, providing an alternative to higher-cost Nvidia processors. Set to ship in 2026, Broadcom anticipates this will boost its AI revenue, with projections exceeding $40 billion for fiscal 2026. The company reported a robust third-quarter revenue of $15.95 billion, with AI sales up 63% to $5.2 billion. For the current quarter, Broadcom expects revenue of about $17.4 billion, with AI chip sales projected at $6.2 billion—up 66% year-over-year. CEO Hock Tan’s commitment to lead through 2030 further instills confidence. Analysts maintain a Strong Buy rating for AVGO, with an average price target of $375.58, suggesting a 12.15% upside.
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