TLDR
- Broadcom (AVGO) stock fell 4.77% Monday after Anthropic CEO Dario Amodei called for a slower pace of AI model development
- CEO Hock Tan said Broadcom’s AI revenue targets remain unchanged: $115 billion in fiscal 2027, doubling to $230 billion in fiscal 2028
- Tan dismissed the slowdown debate, saying AI compute demand is “very strong and very durable”
- Anthropic is on track to become Broadcom’s largest custom chip customer in 2027, replacing Google
- AVGO edged up 0.4% in after-hours trading after Tan’s comments; Mizuho called the broader chip selloff a buying opportunity
Broadcom (AVGO) closed Monday at $344.72, down 4.77%, as a weekend essay from Anthropic CEO Dario Amodei calling for slower AI model development spooked investors across the chip sector.
Amodei’s post drew support from OpenAI CEO Sam Altman and Elon Musk, adding fuel to the selloff. The iShares Semiconductor ETF dropped 5.6% on the day, with other data center names also hit hard.
Broadcom was particularly in focus because Anthropic is one of its biggest custom chip customers. That connection made AVGO especially sensitive to any talk of pulling back on frontier AI development.
CEO Hock Tan pushed back hard. Speaking on CNBC’s “Mad Money” Monday evening, he was direct when asked if anything had changed his view on Broadcom’s forecasts.
“No, not in the least,” Tan said.
He stuck by targets he laid out on Broadcom’s fiscal Q3 earnings call on September 2. Those targets call for AI semiconductor revenue of $115 billion in fiscal 2027, then doubling to $230 billion in fiscal 2028. The fiscal 2028 figure was considered a standout from that earnings report.
Inference Demand Seen as Key Growth Driver
Tan drew a distinction between AI model training and inference, which is the ongoing use of AI models in products and services. He said he sees inference demand as a durable growth driver regardless of how the training debate plays out.
“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 confirmed that Anthropic is on pace to become Broadcom’s single largest custom chip customer in fiscal 2027, taking over from Google, which has historically held that position through its Tensor Processing Unit partnership with Broadcom.
Tan did not dismiss AI safety concerns entirely. He agreed that safeguards have a role to play, but framed AI as a productivity tool rather than an existential risk. He compared its long-term impact to 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.
Trump Weighs In, Mizuho Sees Buying Opportunity
The debate went beyond Broadcom’s boardroom. At the All-In Summit in Los Angeles on Monday, President Trump called Nvidia CEO Jensen Huang live on speakerphone to push back against AI regulation concerns. Trump called fears of an AI takeover a “hoax” and argued that heavy rules would only benefit China.
Afterward, Trump posted on social media calling himself the AI “Hoax Buster.”
Mizuho came out with a note saying the sharp drop in AI-linked chip stocks looks overdone. The firm flagged Broadcom, Micron, Lam Research, and others as well-positioned despite the selloff, adding that calls to slow frontier AI development do not point to any real change in data center spending.
AVGO edged up about 0.4% in after-hours trading following Tan’s CNBC appearance. Analysts on TipRanks maintain a Strong Buy consensus on the stock, with an average price target of $519.21, implying roughly 51% upside from Monday’s close.
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