10:51 AM EDT, 10/14/2025 (MT Newswires) -- Broadcom ( AVGO ) could generate over $100 billion in revenue from its three-year strategic collaboration with Microsoft ( MSFT )- (MSFT) backed OpenAI, Deutsche Bank said in a note Tuesday.

The companies announced the collaboration Monday, under which they plan to deploy about 10 gigawatts of OpenAI-designed artificial intelligence accelerators. Deployment is expected to begin in H2 of 2026 and will be completed by the end of 2029, the companies said.

"We believe this announcement is a strong net positive for AVGO, with OpenAI's adoption of ASICs [application-specific integrated circuits] and ethernet connectivity solutions serving as a ringing endorsement of AVGO's technology and strategic direction," Deutsche Bank said.

While the gross margin on the companies' rack-scale solutions could be "significantly below" corporate average, Deutsche Bank estimates that its revenue potential will yield "meaningful" accretion in earnings per share for Broadcom ( AVGO ).

Deutsche Bank has a buy rating and $400 price target on Broadcom ( AVGO ).

Shares of Broadcom ( AVGO ) were down more than 3% in recent Tuesday trading.

Price: 343.89, Change: -12.82, Percent Change: -3.59