TLDR
- Broadcom (AVGO) closed Tuesday at $342.33, up $13.16 or 4%.
- D.A. Davidson upgraded the stock to Buy from Neutral and raised its price target to $400 from $350.
- Banks and Blackstone will provide $63 billion to finance Broadcom AI chips for Anthropic.
- Anthropic’s S-1 shows about $161.2 billion in lease payments to Broadcom over five years.
- KeyBanc reiterated Overweight with a $575 price target.
Broadcom (AVGO) stock closed Tuesday at $342.33, up $13.16 or 4%. An analyst upgrade and a giant financing deal did the lifting.
D.A. Davidson upgraded the chipmaker to Buy from Neutral. Analyst Gil Luria raised his price target to $400 from $350.
That target implies about 22% upside from Monday’s close. Luria says AVGO trades at 16 times 2027 earnings.
In his view, the market is pricing in almost no chance that AI spending continues. He expects valuations to move back toward the mean.
Luria also named Micron and Nvidia in his note. He said it is unlikely several chip companies do well while NVDA, MU and AVGO struggle.
Anthropic filing shows the size of the Broadcom deal
Anthropic filed its Form S-1 on Monday ahead of a planned Nasdaq listing under the ticker ANT. The filing details five-year equipment leases with Broadcom.
Rent payments on the leases total about $161.2 billion, not counting interest. Payments are due quarterly once the equipment is ready for service.
Luria said the filing leads him to believe the IPO will go ahead. He also expects OpenAI to raise money in its own IPO next year.
Bank of America, Blackstone, Citigroup and Morgan Stanley will provide $63 billion in financing. It is one of the largest debt deals tied to the AI buildout.
About $43.5 billion, or 69%, is first-lien senior debt, Reuters reported. Blackstone is providing the committed second-lien portion.
Broadcom is giving lenders “residual value support.” CEO Hock Tan said the deal shows capital is available to finance AI growth.
KeyBanc and other analysts stay upbeat
KeyBanc reiterated Overweight with a $575 price target. It calls Broadcom the dominant AI ASIC provider.
The firm says Broadcom won the Anthropic ASIC design, expected in late 2028 or early 2029. It expects 5 million to 10 million lifetime units.
KeyBanc also said Broadcom has not lost Meta’s MTIA Apollo design to Mediatek. That award is still pending, and an earlier view was wrong.
It raised its lifetime estimate for OpenAI’s Jalapeño chip to 1 million to 1.5 million units. It still sees AI revenue above $115 billion in fiscal 2027 and $230 billion in fiscal 2028.
Tigress Financial started coverage with a Buy and a $600 target. UBS reiterated Buy with a $470 target.
Piper Sandler started coverage at Overweight. Jefferies pointed to Broadcom’s DSP share at module makers.
Broadcom was trading at $346.50 in premarket on Wednesday. That is up 1.22% from Tuesday’s close.
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