TLDR
- Broadcom shares jumped nearly 9% in premarket trading after announcing a $10 billion AI chip order from a new customer, potentially OpenAI
- The chipmaker reported strong Q3 2025 earnings with 22% year-over-year revenue growth to $15.952 billion
- AI revenue grew 63% year-over-year to $5.2 billion in Q3, with expectations for continued growth in fiscal 2026
- CEO Hock Tan announced he will stay at the helm for at least five more years
- The share gains could add roughly $125 billion to Broadcom’s $1.44 trillion market valuation
Broadcom shares jumped nearly 9% in premarket trading after the chipmaker unveiled a blockbuster $10 billion AI chip order from a new customer. The deal fueled optimism about the company’s strategy to design custom chips for cloud giants.

The massive order comes as Broadcom deepens its role in the generative AI boom. The company is designing custom semiconductors for clients seeking alternatives to pricier Nvidia chips.
If the share gains hold, Broadcom would add roughly $125 billion to its $1.44 trillion market valuation. This surge comes on top of the stock’s 32% gain this year.
The latest deal has fueled speculation that OpenAI is the unnamed customer. A Financial Times report indicated that the ChatGPT maker is working with Broadcom to develop its own custom AI chips.
“This new business with OpenAI reflects a key strength of Broadcom which lies in working closely with customers to develop application-specific chips,” said Russ Mould, investment director at AJ Bell. These chips aim to deliver superior performance and energy efficiency at lower cost.
Analysts at J.P.Morgan, Bernstein and Morgan Stanley said the timing and scale of the deal suggest OpenAI is likely behind it. OpenAI previously worked with Broadcom and TSMC to build its first in-house chip.
However, OpenAI dropped its foundry plans last year due to the costs and time needed to build a network. This partnership with Broadcom appears to be a more practical approach.
The company said it expects improved AI revenue growth in fiscal 2026. This follows strong performance already seen in recent quarters.
Strong Q3 Financial Performance
Broadcom reported impressive Q3 2025 earnings results. The company posted 22% year-over-year revenue growth to $15.952 billion.
GAAP net income reached $4.140 billion for the quarter. Non-GAAP net income came in at $8.404 billion.
Adjusted EBITDA hit $10.702 billion, representing 67% of revenue. Free cash flow stood at $7.024 billion for the quarter.
The company highlighted 63% year-over-year growth in AI revenue. AI revenue reached $5.2 billion in Q3 alone.
This performance demonstrates the company’s successful pivot to capitalize on AI demand. The results show strong momentum across AI accelerators and networking sectors.
Leadership Stability and Future Outlook
CEO Hock Tan announced he would stay at the helm for at least five more years. Tan has led Broadcom for nearly two decades and steered it to the center of the AI boom.
This leadership continuity provides stability as the company executes its AI strategy. Investors have welcomed the news as part of the broader positive sentiment.
Broadcom provided upbeat guidance for Q4 2025. The company expects revenue of approximately $17.4 billion, marking a 24% increase from the previous year.
The company maintained its adjusted EBITDA guidance of 67% of projected revenue. This consistency in margins shows the profitability of Broadcom’s AI business.
Broadcom’s stock trades at 38.6 times its forward earnings estimates. This represents a premium to Marvell’s 20.3 multiple and the broader S&P 500 index’s 22.5.
Management remains optimistic about continued growth in the AI semiconductor sector. Customer investments persist, setting the stage for sustained financial performance in upcoming quarters.
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