Broadcom Stock Drops Amid Revised OpenAI Revenue Estimates
Shares of Broadcom (NASDAQ: AVGO) fell by as much as 5.1% on Thursday, closing down nearly 4.4%. The decline was triggered by revised revenue figures from AI startup OpenAI, which reported annualized revenue at $50 billion—lower than the previously cited $68 billion. This figure had included gross partner revenue for comparison purposes with rival Anthropic. Broadcom is closely tied to OpenAI through a collaboration on an upcoming custom AI processor called 'Jalapeno.' Reports also indicated Broadcom was arranging financing for OpenAI to purchase its chips, raising concerns about the startup's financial health and potential circular funding practices. While no material change in business fundamentals has occurred yet, investors reacted negatively due to uncertainty. Despite the drop, Broadcom remains attractively valued at 31 times forward earnings and 18 times next year’s expected earnings.
Tickers: $AVGO
Topics: artificial intelligence (AI) Broadcom OpenAI revenue disclosure