Broadcom shares moved sharply on Friday as investors digested a potential $60 billion financing package for artificial intelligence chip infrastructure, while UBS maintained its bullish stance after a call with the company's chief executive and finance chief.
Bloomberg News reported that banks in Broadcom's syndicate are preparing to market $42 billion in Class A senior-secured debt, with Blackstone leading an additional $18 billion Class B junior debt tranche. Blackstone has already committed $9 billion from various funds and plans to syndicate the remainder. The financing has been taking shape for several weeks and is being watched closely as a test of whether financial markets remain willing to fund the rapid expansion of AI infrastructure.
Reuters separately reported that Anthropic's IPO filing showed Broadcom had agreed to lend the AI company up to $42 billion to finance infrastructure spending. The broader package could help Anthropic and other AI companies gain access to chips and other data-centre equipment.
UBS analyst Timothy Arcuri reiterated a Buy rating and $470 price target on Broadcom following a virtual roadshow with CEO Hock Tan and CFO Kirsten Spears. Arcuri said the discussion reinforced a strong upward bias to Broadcom's fiscal 2027 and 2028 AI revenue guidance. He also argued that investor concerns about the company's TPU programme are misguided, with management saying demand remains strong for the next two generations of its XPU lineup following the v8i ramp expected in 2027.
Broadcom said it is adding more SRAM and ARM CPU cores to its XPU devices for orchestration and management, making the chips more complex and harder for in-house design teams to replicate. On financing, Broadcom stressed that it "sells chips, not financial products" and is not providing direct financing to its first major customer. Instead, it is helping build a platform that allows the customer to access third-party lenders, with residual-value guarantees covering only a small fraction of the overall financing.
Institutional investors continued to raise exposure. First Financial Bank Trust Division increased its stake by 22% to 47,817 shares worth about $16.8 million. State Street added nearly 9% and holds more than 208 million shares, while Norges Bank opened a new position worth roughly $24.3 billion. Institutions now own just over 76% of Broadcom's stock. Wall Street consensus remains a Moderate Buy, with an average price target of $527.20. Broadcom reported adjusted EPS of $3.32 for its last quarter, beating the $3.22 estimate, with revenue up 85.5% year over year to $29.59 billion.
