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%. Not a bad day at the office.
It was trading at $346.50 in premarket on Wednesday, up another 1%. Two pieces of news drove the move.
An analyst upgrade and a huge financing deal for Anthropic’s chip purchases landed at the same time. Both put Broadcom’s AI business back in focus.
Broadcom $AVGO CEO Hock Tan personally stepped in to get the $63B Anthropic chip deal done.
After nearly two months of negotiations, some banks were considering pulling out of the deal, known as Project North Star.
The problem was growing concerns over AI-related debt and… pic.twitter.com/ombmwUVtqe
— Wall St Engine (@wallstengine) October 27, 2026
D.A. Davidson upgraded the stock 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 said AVGO trades at 16 times 2027 earnings.
He argued the market is pricing in a near zero chance that AI spending continues. He expects valuations to return to the mean over time.
Anthropic filing shows the scale of the Broadcom deal
Anthropic filed its Form S-1 on Monday ahead of a planned listing on Nasdaq under the ticker ANT. The filing shows five-year equipment leases with Broadcom.
Rent payments on those 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, according to Reuters. Blackstone is supplying 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 decision is still pending, and an earlier report was wrong.
It raised its lifetime estimate for OpenAI’s Jalapeño chip to 1 million to 1.5 million units. KeyBanc 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, up 1.22% from Tuesday’s close.
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