Morgan Stanley: Adjusts Broadcom's AI Data Center Revenue Forecast Due to Collaboration with OpenAI

Jin10 reported on October 16 that Morgan Stanley published a research report indicating that Broadcom (AVGO.O) announced a significant partnership with OpenAI, planning to deploy 10 gigawatts of customized AI accelerators and network systems between the end of 2026 and 2029. This marks an important development in their business, making OpenAI likely to become Broadcom's fifth largest XPU major customer. However, Morgan Stanley also believes that the market size described by the company is largely visionary, as OpenAI has successively formed significant partnerships with various technology companies. The execution progress of such a large investment and financing plans remain unclear, and the actual deployment scale for a single customer may vary significantly. They have raised Broadcom's 2027 AI data center revenue forecast from $65.2 billion to $73.2 billion, and adjusted the 2027 revenue and earnings per share forecast from $112 billion and $11.47 to $120 billion and $11.87, respectively. The target price has been raised from $382 to $409, maintaining a positive outlook on its ASIC and network business long-term prospects, and reaffirming the “Overweight” rating.