Hock Tan, CEO of Broadcom.
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Broadcom Shares surged 15% on Friday after Chipmaker said it had secured $10 billion in new customers in revenue calls. Analysts immediately pointed out Openai.
Broadcom CEO Hock Tan told analysts that the fourth largest customer ordered a $10 billion custom artificial intelligence chip after a revenue report that was better than forecast late Thursday.
“One of these outlooks was to announce the production order to Broadcom, which marked them as qualified customers for XPUs,” Tan said. He added that the order has increased Broadcom’s forecast for AI revenue next year as the cargo begins.
Analysts at Mizuho, Cantor Fitzgerald and Keybanc said they consider AI Startup Openai to be their clients. The Financial Times reported Thursday that the two companies have co-designed chips to market next year, citing people familiar with the partnership.
Openai declined to comment on the report.
Broadcom doesn’t name large web-scale customers, but analysts say last year that their first three clients have been Google, Meta Tiktok’s parents-baite dance.
“During the call, I was surprised to see that the company secured $100 billion orders from its fourth XPU customer (I think this is Openai). “Shipping is expected to begin in 2026.”
Broadcom stock has been in tears recently as the company joined in nvidia The forefront of the race to build the types of processors and infrastructure needed for large AI workloads. Inventories have risen by about 130% over the past year, with Broadcom’s market capitalization exceeding $1.6 trillion.
For the third quarter of the third quarter, Broadcom reported revenue and revenue above estimates. The company said that Wall Street analysts expect $17.4 billion in four quarter revenues, exceeding the expected $17.02 billion, with AI revenues reaching $6.2 billion.
But the news of $10 billion in customers has piqued Wall Street.
Tan said he called “instant and fairly substantial demand” to boost the outlook for next year, and called for a real change in his thinking about what 2026 would look like.
The company did not provide specific guidance for next year, but Tan suggested that AI growth could exceed the 50% to 60% range it provided in previous phone calls.
Mizuho analysts increased AI revenue growth by about 60% to 76% next year, totaling $35 billion. Analysts surveyed by LSEG show that total revenue for the fiscal year ending October 2026 is expected to be $81.8 billion, an approximate 30% increase from $63.1 billion this year.
In addition to Hardware, Broadcom has a large software business that has been locked in by the $61 billion acquisition of Server Virtualization Software Vendor VMware in 2023. Revenue for the infrastructure software business, including VMware, rose 43% to $67.9 billion.
– CNBC’s Kif Leswing contributed to this report.
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