Broadcom seen gaining from Anthropic IPO plans

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Broadcom gains from Anthropic IPO

Highlights

Anthropic's S-1 filing to list on Nasdaq as 'ANT' boosts confidence in major AI infrastructure purchases and benefits Broadcom's growth outlook.
D.A. Davidson upgraded Broadcom to buy from neutral, raising its price target to $400 from $350, implying nearly 22% upside from Monday's close.
Broadcom, aided by a $63 billion financing package from major banks, could see Anthropic become its largest XPU customer in fiscal 2027.

IPO filing sharpens growth outlook

As reported by CNBC, citing Anthropic's S-1 filing, the company plans to list on Nasdaq under the ticker "ANT", a step that analysts say improves the likelihood that major AI infrastructure purchases move ahead as planned. That filing has added momentum to the case for Broadcom, which is closely tied to Anthropic's build-out through chip supply and financing arrangements.

D.A. Davidson upgraded Broadcom to buy from neutral after the filing and lifted its price target to $400 from $350, implying nearly 22% upside from Monday's close. Analyst Gil Luria says the offering supports expectations that Anthropic will raise capital and that OpenAI could also pursue an IPO next year, a backdrop he argues is not fully reflected in Broadcom's valuation.

Broadcom shares rose more than 3% in premarket trading. LSEG data shows 48 of 51 analysts covering the stock have a buy or strong buy rating, even as the shares are down nearly 5% year to date.

Financing ties deepen semiconductor exposure

Broadcom is a major partner in Anthropic's infrastructure expansion, and the chipmaker says Bank of America, Blackstone, Citi and Morgan Stanley have created a special purpose vehicle to finance $63 billion in Broadcom AI chips for Anthropic. Earlier this month, Anthropic also disclosed it will borrow up to $42 billion from Broadcom to support its AI infrastructure build-out.

Analysts say that reciprocal relationship could make Anthropic one of Broadcom's biggest design customers in 2027. Raymond James analyst Simon Leopold says Anthropic could deploy another 5 gigawatts of TPU8i capacity in fiscal 2027 and an additional 10 gigawatts in fiscal 2028, potentially making it Broadcom's largest XPU processing units customer in fiscal 2027.

William Blair analyst Sebastien Naji says stronger XPU demand could translate into further upside for Broadcom shares, while Wolfe Research analyst Chris Caso says the financing package makes Anthropic's planned 2027 Broadcom purchases highly likely to proceed. He adds that the ability to finance deals of that scale also improves confidence in bullish 2027 and 2028 forecasts across the broader chip supply chain.

In our earlier article on rising costs and delays in the U.S. AI data center buildout, we highlighted how higher interest rates, inflation, and construction overruns are making it harder for developers to secure funding and deliver projects on time. We also noted that power constraints and local opposition are adding further hurdles, raising doubts about how quickly new computing capacity can realistically come online.

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