Broadcom and OpenAI Cook Up Jalapeño Chip as $16 Billion AI Revenue Forecast Puts Margins Under Microscope
25.06.2026 - 17:24:13 | boerse-global.de
Broadcom has thrown down the gauntlet to Nvidia with a custom AI chip developed in secret alongside OpenAI. The new processor, codenamed “Jalapeño,” was built in just nine months and is purpose-built for AI inference — the real-time processing of live data that powers large language models. Early test units are already running inside OpenAI’s labs, handling specialized workloads like GPT-5.3-Codex-Spark. The chip is manufactured by Canadian contract partner Celestica, and mass shipments to data centers are slated to begin by the end of 2026.
The financial stakes are enormous. Broadcom expects AI-related revenue to hit roughly $16 billion in the third quarter alone — that’s more than half of the company’s total projected quarterly sales. In the prior quarter, that figure stood at just under $11 billion. Over a longer horizon, management has set a cumulative AI revenue target of about $100 billion by the end of fiscal 2027. The chipmaker had already doubled its AI revenue to $8 billion in the previous period, underscoring the rapid ramp-up.
But the push into bespoke silicon comes with a price. Broadcom’s gross margins on these new AI accelerators are thinner than those on its traditional networking switches, thanks to the high integration costs of specialized high-bandwidth memory. To keep the balance sheet in check, the company recently bought back $2.9 billion of its own bonds, trimming its long-term debt. Insider activity has also caught attention: H&S Investments, the conglomerate’s holding vehicle, unloaded shares worth over $170 million on Wednesday, while a handful of other insiders reduced smaller stakes.
Should investors sell immediately? Or is it worth buying Broadcom?
On the stock side, Broadway’s share price has been treading water near €334.05, down slightly on the day, and roughly 22% below the all-time high set in early June. The broader semiconductor sector got a lift from optimistic forecasts out of Micron and Qualcomm, but Broadcom’s equity has been a laggard. Still, the shares have held above the 200-day moving average of €310.41 — a key support level. Year-to-date, the stock is up about 13%. Investors have a concrete date on the calendar: June 30, when Broadcom will pay a dividend of €0.65 per share.
Capacity expansion is moving at breakneck speed. Broadcom aims to deploy over ten gigawatts of AI chip capacity within the next 18 months, a move that directly challenges Nvidia’s Blackwell architecture. The combined development pace and financial heft underline Broadcom’s ambition to own the custom-chip lane as AI infrastructure spending surges. For now, the market is watching whether the margin squeeze and insider selling are mere noise or early signals of a tougher road ahead.
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Broadcom Stock: New Analysis - 25 June
Fresh Broadcom information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
