Wall Street analysts are increasingly bullish on Broadcom (AVGO), positioning the semiconductor giant as a primary beneficiary of the upcoming Anthropic IPO. Driven by significant infrastructure deals and financing commitments between the two companies, analysts project substantial upside for Broadcom’s stock, with some raising price targets following Anthropic’s S-1 filing. Despite a recent dip, the chipmaker’s crucial role in Anthropic’s AI build-out and confirmed financing arrangements underpin strong growth forecasts.
Wall Street is buzzing with predictions, and many analysts are pointing to Broadcom (AVGO) as the major winner poised to capitalize on the upcoming initial public offering (IPO) of AI pioneer Anthropic. This anticipation has prompted calls for investors to consider adding the semiconductor stock to their portfolios.
Anthropic officially announced its intention to list on the Nasdaq exchange under the ticker "ANT" in a recent S-1 filing, setting the stage for what many expect to be another blockbuster tech IPO. The news immediately sent ripples through the market, leading D.A. Davidson to upgrade Broadcom's rating from neutral to a "buy" and significantly boost its price target from $350 to $400 per share. This revised target suggests an impressive upside of nearly 22% from Monday’s closing price.
Gil Luria, an analyst at D.A. Davidson, expressed confidence in the market's future trajectory. "Our reading of the Anthropic [IPO filing] leads us to believe the IPO will proceed, Anthropic will raise its capital, and next year OpenAI will raise more capital in its own IPO, allowing Broadcom to meet its expectations for the next couple of years," Luria noted in a client communication. He further highlighted Broadcom’s current valuation, stating, "At the current 16x multiple on 2027 [earnings per share], AVGO is trading as if the chances of that happening are near zero, which creates significant upside if those deals both materialize." Broadcom shares reacted positively, climbing over 3% in premarket trading following the news.
The strong bond between Broadcom and Anthropic forms the core of this optimism. Broadcom is a critical partner in Anthropic's ambitious infrastructure expansion. Recent disclosures revealed a massive financial commitment: Bank of America, Blackstone, Citi, and Morgan Stanley have collectively established a special purpose vehicle (SPV) to finance a staggering $63 billion for Broadcom's artificial intelligence chips destined for Anthropic. Additionally, Anthropic itself intends to borrow up to $42 billion directly from Broadcom to fuel its AI infrastructure development.
This reciprocal relationship is expected to evolve, with Anthropic potentially becoming Broadcom's largest customer in its chip design business by 2027. Analysts across Wall Street quickly acknowledged this profound connection as a major source of upside for Broadcom’s potential growth, particularly if the Anthropic IPO proceeds successfully.
Simon Leopold, an analyst at Raymond James, elaborated on the scale of this opportunity. "We anticipated Anthropic deploying another 5 [gigawatts] of TPU8i capacity in [fiscal year 2027] and an incremental 10 GW in FY28, becoming Broadcom's largest XPU [processing units] customer in FY27," Leopold explained. He added that the IPO filing offers "compelling support for the magnitude and longevity of this opportunity," while also drawing attention to "Broadcom's potential $42B financing commitment, which may be transferred to a financial partner, highlights a less appreciated financial exposure."
Sebastien Naji, an analyst at William Blair, echoed the sentiment, suggesting that a significant increase in business on the XPU front would likely translate into substantial gains for Broadcom's stock. "We see an attractive risk/reward equation for the stock given Broadcom's XPU customer roadmap and likely upside to expectations," Naji stated.
Furthermore, Chris Caso of Wolfe Research emphasized that Broadcom's multi-billion-dollar financial arrangement with Anthropic is a positive indicator for future growth not just for Broadcom but "up and down the supply chain," implying a broader uplift for several chip stocks. "The financing that covers Anthropic's [2027] AVGO purchases is now in place, which makes it highly likely that those purchases will proceed as planned," Caso affirmed. He concluded that "More broadly, the fact that these purchases do appear to be financeable despite their large size makes it more certain that bullish [2027 and 2028] forecasts will be met - up and down the supply chain."
Despite the widespread bullish outlook from analysts—LSEG data indicates 48 out of 51 analysts rate Broadcom as a "buy" or "strong buy"—the stock has seen a nearly 5% decline year-to-date, underperforming the broader market. This current underperformance, coupled with the strong analyst conviction and the promising Anthropic partnership, presents a compelling narrative for potential upside.
