XPU

Broadcom announced a $10 billion order from AI lab Anthropic for custom TPU Ironwood racks, with an additional $11 billion commitment, marking its fourth XPU customer. A fifth undisclosed client placed a $1 billion order. The deal ties into Anthropic’s multi‑year cloud partnership with Google, granting access to up to one million TPUs. Broadcom’s rack‑level AI accelerators aim to rival Nvidia’s GPUs, potentially boosting its custom‑chip revenue and expanding its foothold in the high‑performance AI market.

Broadcom posted a solid fiscal Q4, with revenue up 28% to $18.02 billion and adjusted EPS rising 37% to $1.95, both beating forecasts. AI‑related sales surged, highlighted by Anthropic’s $10 billion and $11 billion Ironwood XPU orders and a $1 billion deal with a new XPU client. Margins expanded, and Q1 guidance topped expectations, prompting a “Hold” rating and a price‑target lift to $425. However, investors worried about AI customers potentially developing in‑house chips, causing a 4.5% after‑hours drop despite the earnings beat.

.Broadcom beat Q4 expectations, reporting $1.95 EPS and $18.02 bn revenue, and forecast FY‑Q1 revenue of about $19.1 bn, a 28% YoY rise driven by AI demand. AI‑related chip sales doubled to $8.2 bn, boosting net income 97% to $8.51 bn. The company added a fifth custom‑AI customer, with orders totaling $11 bn and a $1 bn commitment for 2026, bringing its AI backlog to $73 bn. Broadcom’s XPU strategy aims to combine GPU throughput with ASIC efficiency, positioning it as a full‑stack AI infrastructure provider amid intense competition from Nvidia and others.

Broadcom’s stock surged after announcing a $10 billion commitment from a new customer, widely speculated to be OpenAI for custom AI chips (XPUs). CEO Hock Tan highlighted the order’s impact on Broadcom’s AI revenue forecast, with shipments expected in 2026. Analysts believe the partnership will optimize OpenAI’s AI models and strengthen Broadcom’s position in the AI market, where it competes with Nvidia. Broadcom’s Q3 results exceeded expectations, with projected Q4 revenue reaching $17.4 billion.