Analysts update Broadcom stock forecast

Core Insights - Broadcom's stock has increased by 104% over the past six months, significantly driven by a $10 billion order for AI racks from OpenAI [1] - OpenAI's total agreements, including those with Nvidia and Oracle, are projected to cost around $650 billion, with total deals potentially nearing $1 trillion when including Broadcom and AMD [1][2] - OpenAI's annual recurring revenue is expected to exceed $20 billion this year, but the company remains unprofitable and may struggle to finance its deals [2] Financial Performance - Broadcom reported Q3 revenue of $15.95 billion, reflecting a 22% year-over-year growth [4][7] - The company achieved a net income of $4.14 billion in Q3, a significant recovery from a net loss of $1.9 billion in Q3 2024 [7] - Adjusted EBITDA for Q3 was $10.7 billion, representing 67% of revenue [7][8] - The company has provided Q4 revenue guidance of approximately $17.4 billion, indicating a 24% year-over-year increase [6] Product Developments - Broadcom introduced the Thor Ultra, an 800G AI Ethernet Network Interface Card (NIC), designed to interconnect hundreds of thousands of XPUs for large-scale AI workloads [3] - The company also launched Wi-Fi 8 silicon solutions aimed at enhancing the broadband wireless edge ecosystem [3] Strategic Positioning - Broadcom's strength is highlighted in its networking stack, which is crucial for addressing challenges in scaling compute nodes beyond 100,000 [4] - The launch of Tomahawk 5 with Open Ethernet allows for scaling up to 512 compute nodes using XPUs, addressing bandwidth challenges in AI racks [4]