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Investing.com - Broadcom Inc (NASDAQ:AVGO), a prominent player in the semiconductor industry with impressive gross profit margins of 77%, saw its shares gain Monday after CFRA highlighted the company’s "extraordinary" visibility and pipeline following a multi-year partnership announcement with OpenAI. According to InvestingPro data, the company maintains strong financial health with 26 analysts recently revising earnings expectations upward.
The newly announced partnership will involve Broadcom supplying custom silicon and networking chips to OpenAI, with deployment expected to begin in the second half of 2026 and continue through the end of 2029. With revenue growth of 28% over the last twelve months and an EBITDA of $32.75 billion, Broadcom appears well-positioned to execute this significant contract.
According to CFRA’s analysis, the two companies will collaborate to build 10 gigawatts of AI infrastructure, contributing to OpenAI’s broader pursuit of over 30 gigawatts of new capacity in the coming years—an initiative that could represent more than $1 trillion in spending. Get deeper insights into Broadcom’s growth potential and 20+ additional ProTips with a InvestingPro subscription, including exclusive access to comprehensive Pro Research Reports.
CFRA noted that Broadcom’s previously announced $10 billion new customer was not OpenAI as many had speculated, with Broadcom’s President of Semiconductor Solutions suggesting this distinction during a CNBC appearance.
The research firm maintained its positive outlook on Broadcom, stating the company is "well-positioned to benefit from the massive AI infrastructure build from existing/new clients, with upside from additional prospects to place large-scale orders in the coming years."
In other recent news, Broadcom Limited has announced a significant multi-year collaboration with OpenAI to develop and deploy 10 gigawatts of custom AI accelerators. This partnership is expected to begin deployment in the second half of 2026 and continue through the end of 2029. Wolfe Research reiterated its Peerperform rating for Broadcom, acknowledging the company’s substantial deal with OpenAI. Melius Research maintained its Buy rating and set a price target of $415, emphasizing the potential revenue boost from the OpenAI agreement. Aletheia Capital initiated coverage on Broadcom with a Buy rating and a $400 price target, predicting that the company’s AI revenue will double year-over-year in 2026 and 2027. Bernstein SocGen Group also reiterated an Outperform rating and a $400 price target, citing strong demand in the compute sector and confidence in Broadcom’s growth trajectory. These developments reflect growing interest and investment in AI technologies, underscored by Broadcom’s strategic partnerships and analyst support.
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