Broadcom Inc (NASDAQ:AVGO, ETR:1YD) shares shot up as much as 15% in early trading on Friday after the semiconductor and infrastructure software solutions provider reported better-than-expected financial results for its third quarter 2025.
The company also revealed that it had received $10 billion in orders from a new client for custom AI chips.
Broadcom’s adjusted earnings per share for the period came in at $1.69, surpassing the $1.65 analyst consensus estimate provided by LSEG.
Its revenue for the quarter, meanwhile, rose 22% to $15.96 billion, better than the Wall Street forecast of $15.83 billion.
In a note to clients, Wedbush analysts suggested that Broadcom’s new $10 billion client could be OpenAI.
“Previous reports had suggested that OpenAI was working on its own AI ASIC (Application-Specific Integrated Circuit) and that it had partnered with Broadcom to develop this product,” the analysts wrote.
“However, the timing of shipments and magnitude of revenues was less certain.”
They added that it appears parts could start shipping as soon as next year, although cautioned that it could take longer for this effort to result in meaningful revenues for Broadcom.
Analysts at Baird see Broadcom’s AI revenue momentum accelerating in 2026 and noted the company’s “impressive” AI backlog.
“(Its stock’s) valuation remains rich and will likely remain so given the acceleration of AI-related revenue ahead, off already very strong growth for this year," they wrote in a note to clients.
Baird reiterated its 'Outperform' rating on Broadcom stock while setting a new price target of $300 per share.