## [# Broadcom Soars on OpenAI Deal, Semiconductor ETFs Jump](/sections/features/broadcom-soars-openai-deal-semiconductor-etfs-jump)
# Broadcom Soars on OpenAI Deal, Semiconductor ETFs Jump
Broadcom’s blockbuster quarter and reports of a new OpenAI chip deal sent the stock soaring and gave semiconductor ETFs a lift.
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[By Sumit Roy ](/authors/sumit-roy)
Sep 05, 2025
Edited by: ETF.com Staff
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Semiconductor ETFs ripped higher on Friday after Broadcom blew past earnings expectations and unveiled a massive new AI customer that will accelerate growth next year.
Broadcom, the world’s second most valuable chip company after Nvidia with a $1.6 trillion market cap, jumped as much as 16.4% after reporting fiscal third quarter earnings of $1.69 per share, ahead of the $1.67 estimate.
Revenue came in at $16 billion, topping expectations of $15.8 billion and up 22% year over year. The company guided to $17.4 billion for the current quarter, which would represent nearly 24% growth.
## Accelerating AI Growth
What got investors most excited, though, was Broadcom’s AI business, especially its custom chip segment. Broadcom works with big tech companies like Alphabet, Meta and ByteDance to design AI accelerators it calls XPUs, which compete with Nvidia’s GPUs. CEO Hock Tan said AI revenue surged 63% in Q3 to $5.2 billion, after a 46% jump in Q2 to $4.4 billion. He forecast another leap to $6.2 billion in Q4.
The real surprise was that Broadcom has now landed a fourth major XPU customer. Tan said the company has already secured over $10 billion of orders tied to this win. The Financial Times later reported that the mystery buyer is OpenAI, maker of ChatGPT, which plans to use Broadcom’s chips to run its products. That update sent Broadcom’s stock soaring.
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## Nvidia Sags
The news marks a shift in the AI chip landscape. Nvidia fell as much as 4.4% on the day as investors worried that OpenAI developing its own silicon could chip away at GPU demand.
The debate over whether custom chips threaten Nvidia has swung back and forth for months. For now, the consensus is that both approaches will thrive, with GPUs prized for flexibility and the tools built around them, and custom chips for specialization and lower cost.
Tech giants like Alphabet, Meta and Amazon are using both types of chips.
## The ETF Impact
For many ETFs, Broadcom’s surge added fuel to the upside, though Nvidia’s drop partly offset it. Both stocks are among the largest holdings in semiconductor funds and in tech ETFs more broadly.
In the [**iShares Semiconductor ETF (SOXX)**](/soxx), Broadcom and Nvidia are tied as the second-largest weights at 8.5% apiece, behind AMD at 9.8%. In the [**VanEck Semiconductor ETF (SMH)**](/smh), Nvidia leads with a 22% stake, while Broadcom sits at about 10%.
And their influence extends beyond semis. Broadcom is a top-five holding in the [**Invesco QQQ Trust (QQQ)**](/qqq) at 5.4%, and the seventh-largest stock in the [**Vanguard S&P 500 ETF (VOO)**](/voo) with a 2.6% weighting.
Nvidia ranks No. 1 in both QQQ and VOO with weightings of 9.5% and 8.1%, respectively.
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[ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy)
Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including… [View Bio](/authors/sumit-roy)
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