Following the Broadcom-OpenAI Deal, Wall Street Says AVGO Stock Still Could Gain 40% From Here

Co-developed with Broadcom (AVGO), ChatGPT-maker OpenAI recently announced its first-ever custom AI chip, Jalapeño. Built for large language model (LLM) inference rather than training, the chip comes amid the company's broader ambitions of reducing dependence on GPUs.

Analysts at Wedbush believe this is a win for Broadcom, although they were mindful of curbing expectations for the near term. “Net, we see this development as a probable positive for AVGO (and OpenAI assuming the silicon eventually works as presented), but also wouldn't be surprised if initial shipments are more modest in scale and broader adoption requires a 2nd or 3rd (or 4th) iteration of the design," said analyst Matt Bryson in a note to clients.