Broadcom Inc (NASDAQ: AVGO) disclosed a major artificial intelligence (AI) infrastructure deal with OpenAI this morning – confirming plans to co-develop and deploy 10 gigawatts of custom accelerators.
But in a surprise twist, Charlie Kawwas, the president of the semiconductor solutions group at AVGO, clarified that OpenAI is not the unnamed $10 billion customer referenced on the earnings call last month.
“I would love to take a $10 billion [purchase order] from my good friend Greg [OpenAI president], but he hasn’t given me that PO yet,” Kawwas revealed in an interview with CNBC today.
Broadcom stock opened more than 10% up on Monday, reflecting investor confidence in the firm’s AI roadmap.
Kawwas’ comment makes Broadcom stock a no-brainer buy
AVGO stock is extending gains today primarily because Kawwas’ revelation means Broadcom has two major AI customers: OpenAI, now publicly confirmed, and a separate mystery client with $10 billion order.
That’s on top of existing relationships with AI hyperscalers like Google and Meta Platforms, which analysts have previously identified as early adopters of Broadcom’s custom silicon.
The announcement essentially indicates AVGO’s custom AI chips (XPUs) are gaining traction as demand for specialized compute surges.
With OpenAI now committed to designing its own chips and relying on Broadcom’s Ethernet stack and manufacturing expertise, the Nasdaq-listed firm is positioned right at the heart of the artificial intelligence infrastructure buildout.
The combination of multiple mega-clients and expanding margins makes Broadcom shares a super compelling buy for investors seeking AI exposure with diversified upside.
Does OpenAI’s deal make AVGO shares more attractive than NVDA
From a valuation standpoint, Broadcom shares may offer better risk-reward than Nvidia at writing.
While NVDA trades at a premium – over 35x sales, according to Barchart – AVGO’s multiple is significantly lower, hovering around 31x only.
Yet both companies are riding the same AI wave. Nvidia dominates with its off-the-shelf GPUs, but Broadcom is carving out a niche in custom silicon and full-stack systems.
That distinction could translate into more stable, long-term contracts and higher operating leverage.
Additionally, AVGO’s exposure is not restricted to AI. Its portfolio spans networking, broadband, wireless, and enterprise storage: sectors that provide steady cash flow and cushion against cyclical swings.
With a market cap now above $1.5 trillion and a growing list of AI clients, Broadcom’s relative valuation discount looks increasingly unjustified.
For investors seeking AI growth at a more reasonable valuation multiple than Nvidia, AVGO stock is emerging as a strong contender.
For investors seeking AI growth without Nvidia’s frothy multiple, AVGO shares are emerging as a strong contender.
How to play Broadcom at current levels
The confirmation that OpenAI isn’t the $10 billion customer only adds to the bullish case for AVGO.
It suggests the firm’s AI pipeline is deeper than many assumed, with multiple hyperscale clients placing large bets on its technology.
As OpenAI scales its infrastructure and other frontier model developers follow suit, Broadcom’s role as a custom chip enabler becomes even more critical.
Kawwas’ comment may have been lighthearted, but the implications are serious: Broadcom is not just riding the AI wave – it’s helping shape it. For long-term investors, that’s a signal worth acting on.
Wall Street also currently has a consensus “buy” rating on Broadcom stock.
The post Breaking: Broadcom’s mystery $10 billion customer isn’t OpenAI appeared first on Invezz