Broadcom: New Anthropic Financing Deal Agrees With Our Bullish Forecast for This Top Stock Pick

Key Morningstar Metrics for Broadcom

• Fair Value Estimate
  : $650
• Morningstar Rating
  : ★★★★★
• Morningstar Economic Moat Rating
  : Wide
• Morningstar Uncertainty Rating
  : High

Broadcom AVGO announced a new financing deal for Anthropic to buy its chips, amounting to $63 billion in total financing over five years. This came shortly after Anthropic filed its own S-1 prospectus, which showed $161 billion in noncancelable orders to Broadcom as its largest chip supplier.

Why it matters: The deal aligns with our forecast for Anthropic to drive huge growth for Broadcom. We expect this deal alone to drive nearly $60 billion in Broadcom revenue in 2027, and Anthropic’s rapid revenue growth and improving operating profit give us confidence in strong long-term growth.

• Investors have been worried about Broadcom providing financial backstops to these financing deals, but we have low concern. To us, Broadcom is only on the hook in a worst-case scenario where Anthropic defaults and artificial intelligence demand collapses to the point lenders can’t repurpose the chips.
• Every data point we see points to no slowdown in AI spending, including rapid AI monetization at Anthropic and public cloud providers and improving Anthropic profitability. These point to durable, high AI demand, which underpins our long-term bullishness on Broadcom.

The bottom line: We maintain our $650 fair value estimate for wide-moat Broadcom, which remains a top chip pick. Anthropic growth is central to our buy thesis, and we expect it to become Broadcom’s largest customer in 2027. We see low risk from Broadcom’s financial backstop.

• Broadcom shares have been down lightly in 2026 despite ballooning growth, which we attribute to long-term market concerns about the durability of AI spending. We take Anthropic’s profitability progress from the S-1 positively, and shares look like a fire sale if growth continues after 2028.
• We continue to see upside to Broadcom’s guidance for $115 billion in total AI revenue in fiscal 2027 and $230 billion in fiscal 2028. To us, this latest financing round is just the tip of the iceberg for Broadcom’s revenue opportunity with Anthropic.