AVGO changes
Pick any two versions below to diff them.
- Price
- $326.08 → $293.69(−9.9%)
- Risks
- Most of the intrinsic value depends on one forecast: AI revenue reaching $115 billion in FY2027. A slower ramp would lower the intrinsic value. A small number of customers buy most of the AI chips. Anthropic pays for its chips with leases that lenders fund and Broadcom partly backs, and OpenAI is in talks about a similar plan. This makes their spending less certain than spending from a customer's own cash flow. Broadcom can owe up to about $29 billion under its backstop of one customer's chip leases, added: up to about $43 billion under a second backstop of AI rack leases that it reported on October 26, 2026, and it can lend the removed: same added: first customer up to $42 billion. A problem at removed: that added: a large AI customer would hurt Broadcom as a removed: supplier added: supplier, as a guarantor and as a lender. Broadcom competes with Nvidia in AI chips. A shift in market share could change future revenue.
- Recent events
- Oct 26, 2026: added: Broadcom said in an 8-K that financial partners took on part of its agreements to buy AI racks built on its custom AI chips, and the related leases to its customer. Broadcom gives residual value support to a new special purpose vehicle. If the customer does not pay, Broadcom pays the difference between 72.5% of the amount owed on the lease and the sale value of the racks. Broadcom said that the maximum is about $43 billion when all racks are in use, and that it expects a payment to be unlikely. Oct 26, 2026: Anthropic filed for its initial public offering. Its S-1 shows TPU equipment leases with Broadcom of about $161.2 billion. Oct 12, 2026: Bloomberg reported that CEO Hock Tan said, at a DBS conference in Singapore, that access to capital, not chips or power, may become the biggest limit on AI growth. He also said that demand for computing still exceeds supply. No official transcript is public, so these words come only from press reports. Oct 7, 2026: Bloomberg reported that Broadcom held early talks to arrange about $30 billion of debt to fund AI chips for OpenAI. The Wall Street Journal reported a figure of more than $50 billion. The talks are at an early stage, and no deal was announced. Oct 2, 2026: Bloomberg reported that banks working with Broadcom started to raise about $60 billion of debt to fund AI chips for Anthropic and other customers. Reports said the plan has a $42 billion senior secured part and an $18 billion junior part led by Blackstone. Broadcom partly supports the value of the chips in the senior part. Broadcom declined to comment, and the terms can still change. Oct 1, 2026: Reuters reported that Anthropic's confidential IPO prospectus says Broadcom agreed to lend Anthropic up to $42 billion as convertible notes. This covers about one third of a $125.2 billion five-year TPU lease. Anthropic does not expect to issue these notes before its IPO. Sep 29, 2026: Reuters reported that Anthropic's confidential IPO prospectus lists about $161.2 billion of equipment lease obligations tied to Broadcom. Most of these obligations are non-cancelable. The prospectus lists at least $518 billion of total compute commitments. Sep 2, 2026: Broadcom reported Q3 FY2026 results. Revenue was $29.59 billion, up 86% from last year. AI chip revenue was $16.7 billion, up 221% from last year. Sep 2, 2026: Management guided Q4 FY2026 revenue to about $34.8 billion. About $21.7 billion of this is AI chip revenue. Sep 2, 2026: Management said FY2027 AI chip revenue will be about $115 billion. This is about double the FY2026 number. Sep 2, 2026: Broadcom said Anthropic is on track to become its largest AI chip customer in 2027, and to stay its largest customer in 2028. Broadcom plans to deploy 1 gigawatt of Ironwood chips for Anthropic in 2026, growing to about 5 gigawatts of TPU v8i chips in 2027 and 10 more gigawatts in 2028.