Core Insights - Broadcom Inc (NASDAQ:AVGO) has officially partnered with OpenAI to co-develop custom AI processors and 10 gigawatts of AI accelerators, marking a significant collaboration after 18 months of working together [1] Stock Performance - AVGO's stock increased by 9.6%, trading at $355.81, approaching its record high of $374.23 from September 11 [2] - The stock has shown a year-to-date increase of 53% [2] - The 14-day relative strength index (RSI) is at 26.9, indicating that the stock is in "oversold" territory, which often precedes a short-term bounce [2] Options Activity - There has been a notable increase in options trading, with 330,000 calls and 187,000 puts exchanged, which is double the typical volume [4] - The October 400 call option is the most popular, with new positions being opened [4] - Broadcom's Schaeffer's Volatility Index (SVI) is at 50%, ranking in the low 9th percentile of its annual range, suggesting that options traders are anticipating low volatility [4]

Broadcom (NASDAQ:AVGO) is expanding its footprint in Japan's artificial intelligence chip ecosystem through a new partnership with NTT to develop optical semiconductor devices designed to cut data center power use by up to 50%. Broadcom is strengthening its global AI leadership as it teams with Japan's NTT to produce advanced optical chips by 2026, aiming to tackle the soaring energy demands of AI data centers while boosting processing speed and efficiency. NTT aims to produce an advanced optical semico ...

Core Viewpoint - Broadcom is positioned to capitalize on the disruptive trend of artificial intelligence (AI), with potential for significant revenue growth and stock price appreciation over the long term [2][4][10]. Group 1: Growth Opportunities - Broadcom estimates an addressable market for AI could reach between $60 billion to $90 billion annually in the coming fiscal years, driven by demand from cloud hyperscalers using its custom AI processors and networking chips [4]. - The company is engaged with two additional hyperscalers to develop customized AI accelerators, which are expected to contribute to growth starting next year [5]. - Broadcom has recently been selected to develop custom AI chips for two more cloud hyperscalers, leading to upward revisions in revenue estimates [6]. Group 2: Infrastructure Software Business - Broadcom's infrastructure software business is experiencing robust growth, with a year-over-year increase of 25% in the second quarter of fiscal 2025 [8]. - The private cloud server market is projected to grow from nearly $114 billion in 2023 to over $508 billion by the end of the decade, indicating sustained growth potential for Broadcom's software segment [9]. Group 3: Earnings Growth Potential - Analysts forecast a 36% increase in earnings for Broadcom this year, with expectations of continued double-digit growth in the following years [10]. - If Broadcom achieves an annual earnings growth rate of 20% post-fiscal 2027, its earnings per share could reach $13.88 in five years, potentially driving the stock price to $527, more than double its current value [12][13].