AI infrastructure momentum lifted two major chipmakers on Tuesday. Broadcom shares rose more than 4% after DA Davidson upgraded the stock to Buy from Neutral and raised its price target to $400 from $350, implying about 22% upside. Analyst Gil Luria pointed to Anthropic's S-1 filing as evidence that the AI developer's IPO will proceed, and suggested a future OpenAI IPO could support Broadcom's multi-year expectations.
Anthropic's Form S-1, filed with the SEC on Monday, disclosed five-year master equipment leases with Broadcom totaling roughly $161.2 billion excluding interest. The filing also revealed a $63 billion financing arrangement from Bank of America, Blackstone, Citigroup and Morgan Stanley to fund purchases of Broadcom AI chips and networking equipment. First-lien loans or senior debt account for about $43.5 billion, or 69% of the total. Broadcom is providing residual value support to lenders. Broadcom CEO Hock Tan said the transaction underscores the power of its advanced technology and conviction in the AI ecosystem.
AMD also gained more than 4% after announcing a $1 billion investment in Meta's equity offering and an expanded partnership covering CPUs, GPUs, networking, systems and software for AI workloads. The companies said AMD Helios rack-scale solutions are installed and being tested at Meta, with broader deployment planned. Meta has deployed millions of AMD EPYC processors, and AMD Instinct GPUs are used for training, ranking, and recommendation systems. AMD Chair and CEO Lisa Su called Meta a strategic partner; Meta CEO Mark Zuckerberg said AMD has been an important partner for frontier AI model infrastructure.
Ahead of AMD's third-quarter results on November 3, GF Securities raised its price target to $720. Analyst Jeff Pu expects broadly in-line results but a potentially weaker current-quarter outlook. He expects AMD to reiterate data-center growth of well over 100% year over year in 2027, with Helios rack shipments ramping in Q1 2027. Bernstein's Stacy Rasgon maintained a Buy rating and $650 price target.
