11:16 AM EDT, 09/05/2025 (MT Newswires) -- Broadcom ( AVGO ) is second only to Nvidia ( NVDA ) as an artificial intelligence franchise as the market leader in AI application-specific integrated circuits with seven projects announced, Oppenheimer said in a note emailed Friday.

The company posted results that surpassed expectations, with fiscal Q3 and Q4 sales guidance exceeding consensus by 1% and 2%, respectively, Oppenheimer analysts said. Fiscal Q4 sales are expected to grow 9% sequentially, led by AI ASIC and networking, which were guided up 20%, the analysts noted.

Broadcom ( AVGO ) unveiled its fourth AI XPU customer set to ramp up in 2026 with an initial order of $10 billion, the analysts said, adding that they believed the firm to be OpenAI. Broadcom ( AVGO ) also mentioned the potential to convert another of its three remaining prospects into an active customer by the end of 2026, the analysts said.

The company's total backlog was reported at $110 billion, with more than half in the semiconductor segment led by AI products that are shippable over the next 12 months, according to the note.

AI revenue growth is expected to jump from 64% in fiscal 2025 to 88% in fiscal 2026, above consensus estimates of 60%, the note said.

Oppenheimer reiterated the company's stock rating at outperform and increased the price target to $360 from $325.

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