Broadcom stock needs a win. The new OpenAI co-designed Jalapeno chip might do the trick

Broadcom shares have lost nearly 20% since early June on what can only be described as a sub-optimal quarter. Could Wednesday's unveiling of Jalapeno, a new custom chip co-designed with OpenAI, put the floor under Broadcom stock? Jalapeno is being described by OpenAI and Broadcom as an artificial intelligence accelerator for a platform the two companies are building "to make advanced AI faster, more reliable, and more accessible to more people." We found out about the Broadcom-OpenAI custom chip deal about eight months ago. Jalapeno is their first joint project. The new chip aims to lower token costs by improving the performance per watt. A token is a unit of AI computation. Energy is the major cost when it comes to running AI models. The news involving OpenAI, the creator of ChatGPT, comes as Broadcom stock fights to get back on track. While Broadcom earnings out the evening of June 3 were good, they were not enough to justify the Club stock's run to record highs two sessions before the print. Broadcom sank 12.6% on June 4 and has been stalled ever since. News that long-term custom silicon customer, Alphabet , was in talks with MediaTek to help design future AI Tensor Processing Units (TPU), and that ByteDance is in talks with Qualcomm to help design future chips, certainly has not helped. To be sure, we don't think either Alphabet or ByteDance is necessarily looking to replace Broadcom as a key design partner. …