Broadcom Jumps 4% as Anthropic IPO Filing Reveals $161.2 Billion Deal; D.A. Davidson Upgrades to Buy

Broadcom (AVGO) rose 4% to $342.33 on Tuesday after Anthropic's IPO filing disclosed a $161.2 billion spending commitment to the chipmaker, prompting D.A. Davidson to upgrade the stock to Buy from Neutral and lift its price target to $400 from $350. Analyst Gil Luria said the filing gives investors clearer visibility into Anthropic's importance to Broadcom's future business. He estimates Anthropic will purchase at least 16 GW of compute capacity through 2028, roughly half of Broadcom's prior 32.3 GW outlook. The $400 target implies about 21 times estimated 2027 earnings, versus roughly 16 times currently. The arrangement carries financing risk. Broadcom on Monday disclosed a $63 billion transaction in which Wall Street banks fund hardware purchases that are then leased to Anthropic. Broadcom guaranteed a minimum residual value on the equipment, with maximum first-year exposure of $43 billion, declining to zero over the five-year lease. Truist's William Stein called the risk limited, noting the figure represents a worst-case scenario.