Broadcom (NASDAQ; AVGO) is the latest company to see its share price rally after striking a deal with artificial intelligence (AI) firm OpenAI.

AVGO stock surged 10% on Monday to trade at $358, extending the chipmaker’s impressive 55% gain year to date.

The rally followed news of a partnership in which Broadcom and OpenAI announced a multi-year collaboration to develop and deploy 10 gigawatts of custom AI accelerators, specialized chips designed to power the massive computing workloads of advanced AI systems. The rollout is set to begin in the second half of 2026 and conclude by the end of 2029.

Under the agreement, OpenAI will design the accelerators and systems, while the semiconductor giant will co-develop and manufacture the hardware.

The companies have already signed a term sheet for the initiative, expanding on their existing partnership for AI chip supply and co-development.

At the same time, the project will rely heavily on Broadcom’s Ethernet and connectivity solutions to ensure scalability across OpenAI’s data centers and those of its partners.

OpenAI CEO Sam Altman said partnering with Broadcom was essential to “building the infrastructure needed to unlock AI’s potential,” while Broadcom CEO Hock Tan described it as “a pivotal moment in the pursuit of artificial general intelligence.”

Analysts remain bullish on AVGO stock 

Meanwhile, analysts remain bullish on Broadcom’s outlook, citing its growing dominance in the AI market. 

For instance, Aletheia Capital initiated coverage with a ‘Buy’ rating and a $400 price target, projecting strong AI-driven revenue growth. 

Bernstein also reiterated an ‘Outperform’ rating with the same target, pointing to solid demand in computing and a robust growth outlook. 

Finally, KeyBanc maintained its ‘Overweight’ rating with a $420 target, expecting strong October earnings and upbeat January guidance.

Featured image via Shutterstock