Broadcom Inc. shares reached an all-time high of $448.44 during Friday's trading session before pulling back to close at $434.48, up 1.9% on the day. The stock's rally was fueled by a combination of strong AI chip demand and a major financing deal for Anthropic's AI infrastructure buildout. Trading volume was heavy at approximately 14.8 million shares, pushing the company's market capitalization to $2.11 trillion.
Billion Debt Deal Backed by Broadcom
Late Thursday, reports emerged that Apollo Global Management and Blackstone are seeking investors for roughly $36 billion in debt financing tied to Anthropic's aggressive expansion of its AI infrastructure. According to Bloomberg News, the debt will be used to purchase Google's custom TPU chips, which Anthropic will then lease. Broadcom, as Google's key chip partner, is backstopping the main payment components of the deal, underscoring the company's central role in the AI supply chain.
Analyst Upgrades Boost Sentiment
The positive news prompted analyst upgrades. Susquehanna's Christopher Rolland raised his price target on Broadcom to $490 from $450, citing continued optimism about the company's custom chip business. Aletheia Capital's Stefan Chang increased his target to $525 from $500, noting that near-term numbers are less critical than Broadcom's TPU-related commentary. These upgrades reflect growing confidence in Broadcom's ability to capitalize on the AI boom.
Earnings Preview: Fiscal Q2 Results Due June 3
Investors are now looking ahead to Broadcom's fiscal second-quarter earnings report, scheduled for release after the bell on June 3, with a conference call at 5 p.m. EDT. The company's strong performance in recent quarters has set high expectations. In its fiscal first quarter, Broadcom reported revenue of $19.31 billion, a 29% year-over-year increase, driven by a 106% surge in AI-related revenue to $8.4 billion. CEO Hock Tan noted that AI revenue growth is accelerating, and the company has guided for second-quarter revenue of approximately $22.0 billion.
Custom Chip Partnerships Expand
Broadcom's custom chip business continues to gain traction. FuriosaAI announced Wednesday that it has partnered with Broadcom to develop a third-generation AI accelerator focused on inference—the process of using a trained AI model to generate results. Charlie Kawwas, president of Broadcom's Semiconductor Solutions Group, emphasized that inference performance is increasingly about data reuse and communication efficiency across servers and racks.
Anthropic itself deepened its collaboration with Google and Broadcom in April, committing to several gigawatts of new TPU capacity expected to become available starting in 2027. CFO Krishna Rao described the deal as Anthropic's most significant compute commitment to date.
Broader Chip Sector Mixed
While Broadcom surged, the broader chip sector showed mixed performance. Nvidia gained 0.9%, while AMD dropped 2.6% and Marvell fell 0.5%. The iShares Semiconductor ETF (SOXX) was down 0.7% in early afternoon trading. Marvell remains a close competitor, having stated this week that its custom chip unit is on track to generate more than $10 billion in revenue by fiscal 2029 as cloud customers invest in AI data centers and seek to reduce reliance on Nvidia processors.
Risks and Valuation Concerns
Despite the optimism, there are risks. The debt financing for Anthropic is still in negotiation, and the final terms could change. If Broadcom's backstop raises concerns about its balance sheet, or if demand for leased chips declines, or if next week's earnings forecast fails to deliver a larger AI deal pipeline, the stock's valuation could come under pressure. Broadcom currently trades at more than 100 times trailing earnings, according to market data.
The June 3 earnings call will be a critical test, as investors will be looking for evidence that Broadcom can convert 2027 and 2028 AI demand into funded hardware orders, rather than just customer promises.
