Usman Salis
Broadcom's stock experienced a significant rally after confirming its mysterious $10 billion chip customer isn't OpenAI, revealing that AI infrastructure demand is spreading wider across tech giants than previously thought. This development marks a turning point in how hyperscalers are approaching custom silicon for artificial intelligence.
Stock Performance Highlights
Broadcom (NASDAQ: AVGO) shares surged 10.5% to $358.72 in early trading on October 13. The stock opened at $352.77, hit an intraday high of $358.86, and bounced off a low of $343.52. With a market cap of $1.67 trillion, a P/E ratio of 91.64, and a dividend yield of 0.66%, the sharp gap-up from the previous close of $324.63 reflected strong investor confidence in the company's AI prospects.
The Customer Mystery Solved
According to Shay Boloor on Twitter, Broadcom's chip president confirmed that the $10 billion customer announced in September is not OpenAI. This clarification ends weeks of speculation and reveals something more significant: multiple hyperscalers are racing to secure custom chip capacity for their AI infrastructure rather than demand being concentrated in a single player.
Broadcom's position in the AI supply chain is strengthening as companies compete to train and deploy increasingly powerful large language models. The demand for application-specific integrated circuits and networking chips continues climbing, and Broadcom's expertise positions it perfectly to capitalize on this trend.
Why Custom Silicon Matters Now
The rush toward Broadcom's custom chips is driven by three key factors. First, training next-generation models like GPT-5 and Gemini 3 demands enormous compute capacity that standard solutions struggle to provide efficiently. Second, hyperscalers want alternatives to NVIDIA's dominant GPU offerings, seeking cost-optimized custom silicon that better fits their specific workloads. Third, building custom ASICs gives these tech giants greater control over performance, energy efficiency, and future scalability of their AI infrastructure.
Broadcom's decades of experience in ASIC design, networking technology, and cloud infrastructure make it an ideal partner for hyperscalers looking to build proprietary AI computing platforms.
Usman Salis
