Broadcom's 10GW AI Deal With OpenAI Could Generate Up To $300 Billion Revenue, Analysts Highlight Growth From Custom Silicon And Networking Solutions

Broadcom (NASDAQ:AVGO) and OpenAI have launched a multi-year partnership to deploy 10 gigawatts of custom artificial intelligence silicon and rack-level systems, integrating compute Application-Specific Integrated Circuits (ASICs) along with Broadcom's Ethernet, Peripheral Component Interconnect Express (PCIe) and optical connectivity solutions. The deal expands beyond compute chips to networking silicon and server racks, positioning Broadcom to optimize performance and scale next-generation technologies.

JP Morgan analyst Harlan Sur maintained an Overweight rating on Broadcom with a price forecast of $400.

Goldman Sachs analyst James Schneider reiterated a Buy on Broadcom and raised the price forecast from $360 to $380.

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JP Morgan: Sur noted that Broadcom and OpenAI have partnered on a multi-year plan to deploy 10 gigawatts of custom AI silicon and rack-level systems, integrating compute XPU ASICs along with Broadcom's full portfolio of Ethernet, PCIe, and optical connectivity solutions. The analyst emphasized that the collaboration extends beyond compute chips to networking silicon and server racks, allowing Broadcom to optimize the stack for efficiency gains and maximize intelligence per watt.

He said that next-generation technologies, including 3D chip stacking and co-packaged optics, could further scale computing capabilities.

Sur estimated that each gigawatt of capacity could generate $25–$30 billion in revenue for Broadcom, implying a total potential revenue of $250–$300 billion for the 10 GW infrastructure.

The analyst stated that deployment will commence in the second half of 2026 and is expected to be completed by 2029, with initial annual revenue projected to range from $70 billion to $90 billion over the four years. He also confirmed that the previously announced $10 billion order from Broadcom's last earnings call was likely for Anthropic, not OpenAI, involving Tensor Processing Unit (TPU) ASICs co-designed with Google and Broadcom for networking and rack-scale deployment.

Sur reiterated Broadcom as his top semiconductor pick due to its diversified business model, strong margin profile, and exposure to growth trends in AI, data centers, and infrastructure.

Goldman Sachs: Schneider highlighted Broadcom's strategic partnership with OpenAI to deploy 10GW of custom-designed AI accelerators and networking products. The analyst noted that deployments reinforced Broadcom's technology leadership in custom silicon.

He also highlighted the company's strong position relative to its competitors, including Advanced Micro Devices’ (NASDAQ:AMD) 6GW partnership with OpenAI, which involves a significant equity contribution.

Schneider estimated that each gigawatt of AI datacenter deployment could generate $10–$15 billion in incremental revenue and contribute roughly $1.00–$1.50 in EPS for Broadcom.

The analyst noted that the announcement signals growing adoption of custom silicon in the accelerator market and strengthens Broadcom's leadership in custom ASIC and Ethernet networking.

He highlighted that AI networking and rack-level solutions for OpenAI present an underappreciated upside.

Schneider reiterated Broadcom as a Buy, citing strong visibility into fiscal 2026/27, industry-leading margins, and expected stock outperformance.

Price Action: AVGO stock was trading lower by 3.49% to $344.26 at last check on Tuesday.

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