Key Takeaways
- Shares of Broadcom (AVGO) declined 4.77% on Monday following comments from Anthropic’s CEO Dario Amodei advocating for a decelerated approach to AI model advancement
- Hock Tan, Broadcom’s CEO, reaffirmed the company’s ambitious AI revenue projections: $115 billion for fiscal year 2027, with expectations to reach $230 billion by fiscal 2028
- Tan rejected concerns about an AI slowdown, emphasizing that demand for AI computing power remains “very strong and very durable”
- By 2027, Anthropic is projected to surpass Google as Broadcom’s top custom chip client
- Following Tan’s reassuring statements, AVGO shares gained 0.4% in extended trading; Mizuho analysts view the chip sector’s decline as a strategic entry point
Broadcom (AVGO) finished Monday’s session at $344.72, marking a 4.77% decline after Anthropic’s CEO Dario Amodei published a weekend piece advocating for a more measured pace in AI model development, triggering concern throughout semiconductor markets.
The article resonated with prominent figures including OpenAI’s Sam Altman and Elon Musk, who expressed agreement, intensifying the market reaction. The iShares Semiconductor ETF experienced a 5.6% slide, with data center-focused companies bearing the brunt of the selloff.
Broadcom attracted particular attention given Anthropic’s status as one of its most significant custom silicon clients. This relationship made the chipmaker especially vulnerable to discussions about potentially scaling back cutting-edge AI initiatives.
However, CEO Hock Tan offered a forceful rebuttal. During an appearance on CNBC’s “Mad Money” Monday night, he responded unequivocally when questioned about whether recent events had altered his outlook on the company’s projections.
“No, not in the least,” Tan said.
He reaffirmed the guidance he presented during Broadcom’s fiscal Q3 earnings announcement on September 2. The projections anticipate AI semiconductor revenue reaching $115 billion in fiscal 2027, followed by a doubling to $230 billion in fiscal 2028. The 2028 projection particularly captured market attention during that earnings presentation.
Inference Computing Positioned as Sustained Growth Engine
Tan highlighted the difference between training AI models and inferenceāthe practical deployment of AI systems in real-world applications and services. He positioned inference demand as a reliable growth catalyst independent of debates surrounding model training intensity.
“I don’t know about training, but when you want to productize inference, I see it continuing to be very, very strong,” Tan said.
He also verified that Anthropic is positioned to become Broadcom’s largest custom chip partner by fiscal 2027, displacing Google, which has maintained that distinction through its long-standing Tensor Processing Unit collaboration with Broadcom.
Tan acknowledged AI safety considerations without dismissing them outright. He characterized AI as a productivity enhancement rather than an existential threat, drawing parallels between its transformative potential and the Industrial Revolution.
“It is still at the end of the day a tool that will make our society, humanity, reach a better level of living,” Tan said.
Political Commentary and Analyst Optimism Emerge
The conversation extended beyond corporate leadership. During Monday’s All-In Summit in Los Angeles, President Trump made a live speakerphone call to Nvidia’s Jensen Huang to counter regulatory concerns around AI. Trump characterized fears about AI dominance as a “hoax” and suggested that excessive regulation would primarily advantage China.
Following the event, Trump took to social media, dubbing himself the AI “Hoax Buster.”
Investment firm Mizuho released analysis suggesting the pronounced decline in AI-related semiconductor stocks represents an overreaction. The firm identified Broadcom, Micron, Lam Research, and similar companies as fundamentally sound despite the market turbulence, noting that discussions about moderating frontier AI development don’t signal actual shifts in data center capital expenditure.
AVGO climbed approximately 0.4% during after-hours trading following Tan’s CNBC interview. TipRanks analysts continue to rate the stock as a Strong Buy, with a consensus price target of $519.21, suggesting potential upside of about 51% from Monday’s closing price.
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