TLDR
- Broadcom stock was up 4% at $343.59 in early Tuesday trading, after a 2% gain Monday.
- Anthropic’s IPO filing shows $161.2 billion in commitments to Broadcom.
- D.A. Davidson upgraded Broadcom to Buy from Neutral and raised its target to $400 from $350.
- Broadcom could face up to $43 billion in first-year risk from a $63 billion hardware leasing deal.
- StoneX kept its $545 target, while UBS and Rosenblatt reiterated Buy ratings.
Broadcom (AVGO) stock was up 4% at $343.59 in early trading Tuesday. The move followed details of a $63 billion financing deal tied to Anthropic.
The chip designer has had a rough couple of months. The stock was down close to 5% for the year coming into Tuesday’s session.
Monday brought a 2% gain after Anthropic released its IPO filing. Tuesday’s jump built on that move.
The filing showed Anthropic has made $161.2 billion in commitments to Broadcom. The two were already known partners, but now the scale is clear.
Analyst Upgrade and Price Targets
D.A. Davidson analyst Gil Luria upgraded Broadcom to Buy from Neutral. He raised his target price to $400 from $350.
Luria says Broadcom trades at 16 times forecast 2027 earnings. His new target equals 21 times that figure.
He also sees a path for OpenAI. If Anthropic’s IPO goes well, he expects OpenAI to follow next year, and OpenAI has already raised $122 billion this year.
Luria expects Anthropic to buy at least 16 gigawatts from Broadcom between now and 2028. That would be about half of the roughly 32.3 gigawatts Broadcom has given guidance for.
StoneX kept its Buy rating and $545 price target. Analyst Cody Acree pointed to the financing arrangement.
How the $63 Billion Deal Works
Wall Street firms will finance hardware from Broadcom, then lease it to Anthropic. The Wall Street Journal reported that CEO Hock Tan personally stepped in to convince the banks.
Bank of America, Citi and Morgan Stanley are arranging the first lien. Blackstone anchors the committed second lien.
Broadcom is guaranteeing the equipment will keep a minimum value. If it loses value faster than expected or the lease falls through, Broadcom absorbs the shortfall.
That puts Broadcom on the hook for up to $43 billion in the first year. The exposure drops to zero over the five-year lease.
Truist analyst William Stein called the risk minimal. He said peak liability applies only under highly pessimistic circumstances.
The vehicle will buy Broadcom accelerators and networking systems for Anthropic’s fiscal 2027 plans. Deliveries start in 2027, and management said the financing is fully underwritten and committed.
Other analysts have weighed in too. UBS reiterated Buy with a $470 target, and Rosenblatt kept Buy with a $600 target.
KeyBanc stays at Overweight and pointed to an Anthropic chip design project expected in late 2028 or early 2029. Tigress Financial Partners started coverage with a Buy rating, and Jefferies flagged possible DSP share gains ahead of the OCP Global Summit.
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