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Broadcom Inc. (AVGO) shares surged over 9% on Monday, October 13, 2025, following the announcement of a major partnership with OpenAI to develop and deploy custom artificial intelligence accelerators. The collaboration represents a pivotal expansion of Broadcom’s AI infrastructure business and positions the chipmaker as a key supplier for one of the world’s leading AI companies. Trading at $354.11 as of 11:48 AM EDT, the stock gained $29.48 (+9.08%) from its previous close of $324.63, with the day’s trading range spanning $343.52 to $358.88.

New Partnership Expands Broadcom’s Role in Global AI Infrastructure
 

Broadcom and OpenAI unveiled a multi-year collaboration to co-develop and deploy 10 gigawatts of OpenAI-designed AI accelerators, with deployments targeted to begin in the second half of 2026 and complete by the end of 2029. The custom chips will be designed by OpenAI and developed in partnership with Broadcom, allowing the AI leader to embed insights from frontier model development directly into the hardware. The deployment scale is massive—consuming power roughly equivalent to more than 8 million U.S. households or five times the electricity produced by the Hoover Dam.

The systems will be scaled entirely using Broadcom’s Ethernet and connectivity solutions, reinforcing the company’s AI infrastructure portfolio leadership. This approach gives Broadcom an advantage over rivals like Marvell Technology while challenging Nvidia’s InfiniBand networking dominance. The partnership builds on existing co-development and supply agreements between the two companies, with both having signed a term sheet to deploy racks incorporating the AI accelerators and Broadcom networking solutions.

OpenAI CEO Sam Altman called the partnership “a critical step in building the infrastructure needed to unlock AI’s potential and deliver real benefits for people and businesses.” For Broadcom, the deal validates the importance of custom accelerators and Ethernet-based scale-up and scale-out networking in AI data centers, positioning the company among cloud giants like Google and Amazon that are developing custom chips to meet surging AI demand.

AVGO Stock Extends Gains as Analysts Turn More Bullish
 

Broadcom’s stock has delivered exceptional returns, with year-to-date gains of 53.88% significantly outpacing the S&P 500’s 13.01% return. Over the past year, AVGO shares have surged 97.11%, and the five-year return stands at an impressive 939.00% compared to the S&P 500’s 89.26%. The company’s market capitalization reached $1.673 trillion, with analysts setting an average price target of $371.07—suggesting modest upside from current levels. The stock trades at a forward P/E ratio of 36.76 with a PEG ratio of 0.55, indicating growth potential relative to valuation.

Wall Street analysts remain bullish on Broadcom’s prospects, with 47 analysts rating the stock as “Strong Buy” or “Buy” in October. Keybanc recently raised its price target from $400 to $420 while maintaining an “Overweight” rating. The company has emerged as one of the biggest winners of the generative AI boom, with its stock price rising nearly six-fold since the end of 2022. Broadcom unveiled a blockbuster $10 billion custom AI chip order in September, which analysts now believe was likely from OpenAI.

The OpenAI deal reinforces Broadcom’s transformation from a traditional networking hardware company into an AI infrastructure powerhouse. With OpenAI serving over 800 million weekly active users and strong enterprise adoption, the partnership positions Broadcom to capture significant revenue from the AI acceleration market. Investors appear confident in the company’s ability to execute on this vision, as evidenced by the strong premarket rally that saw shares jump more than 12% before settling to a 9% gain during regular trading hours.

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