Broadcom (AVGO) stock soared on Monday after the semiconductor company announced a new partnership with ChatGPT maker OpenAI (PC:OPAIQ). Broadcom has confirmed that it signed a massive partnership with the artificial intelligence (AI) company. This comes after the company announced a $10 billion deal in September that experts believed was with OpenAI.
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Under the terms of this deal, Broadcom will work with OpenAI to help the company develop its first in-house AI racks. The two companies are set to build and deploy 10 gigawatts worth of the custom systems, with the first of these racks set to be deployed in late 2026. They will cover the unique networking, memory, and compute requirements for the company’s AI business.
Broadcom CEO Hock Tan spoke about the deal in a podcast featuring the company and OpenAI’s executives. In the podcast, he said, “You continue to need compute capacity — the best, latest compute capacity — as you progress in a road map towards a better and better frontier model and towards superintelligence. If you do your own chips, you control your destiny.”
Broadcom Stock Movement Today
Broadcom stock was up 8.99% on Monday, extending a 51.56% rally year-to-date. The shares have also climbed 78.06% over the past 12 months.
Traders will note that Broadcom has joined a growing list of companies that have benefited from deals with OpenAI. Nvidia (NVDA) and Advanced Micro Devices (AMD) stocks both underwent extreme rallies after they announced partnerships with the ChatGPT developer.
Is Broadcom Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Broadcom is Strong Buy, based on 27 Buy and two Hold ratings over the past three months. With that comes an average AVGO stock price target of $378.92, representing a potential 6.08% upside for the shares.
