Broadcom’s $25 Billion Anthropic Guarantee and AI Chip Surge Bolster Top Analyst Rating

Broadcom guarantees $25B of Anthropic's $36B financing, as custom AI chip revenue jumps 143% to $10.8B. Stock slips on software miss but outlook remains bullish.

Anthropic’s plan to build a massive AI infrastructure got a major backstop from Broadcom this week. The chipmaker is guaranteeing a $25 billion tranche of the startup’s $36 billion financing package, a move that slices the effective yield for investors down to roughly 5.75%. Anthropic intends to use the capital to lease custom processors from Google — hardware that Broadcom itself helps design and produce. The deal underscores just how deeply the company is now embedded in the largest AI deployment efforts.

That financing news arrived alongside results that showed the core AI chip business firing on all cylinders. Revenue from custom accelerators — the so-called ASICs that power training and inference at hyperscalers — surged 143% to $10.8 billion in the most recent quarter. The figure helped push total quarterly revenue to $22.2 billion, a whisker below what Wall Street had modelled. The stock slipped about 3% in after-hours trading on the modest miss in the software division, but the year-to-date gain remains a robust 39%.

The infrastructure-software segment proved the soft spot. Sales there came in at $7.18 billion, shy of the $7.32 billion consensus. Analysts had hoped for a stronger contribution from the VMware integration, which is meant to transform Broadcom’s revenue mix toward recurring subscriptions. Still, the longer-term picture keeps the Street bullish.

Broadcom now sits atop the S&P 500 analyst rankings with a consensus score of 4.72 out of 5. Seven analysts rate the stock a buy, three say hold, and none recommend selling. The average price target stands at €481.97 — roughly 16% above the current level of €414. No other name in the index commands such unanimous confidence. Comfort Systems USA trails at 4.71, followed by Danaher, Amazon, and Boston Scientific. The optimism is rooted in two structural engines: VMware’s subscription model and the accelerating demand for custom chips at companies like Google, Meta, and OpenAI.

Chief executive Hock Tan is pressing ahead with a strategic pivot that caught many off guard. Broadcom will now deliver only bare chips rather than complete integrated AI systems. The refocus is meant to sharpen its offering for a small, elite group of six core customers. “We are discontinuing the system business to concentrate full resources on our key accounts,” Tan told analysts. The move sacrifices some immediate revenue in exchange for deeper partnerships with the world’s biggest AI spenders.

Management used the earnings call to lift the full-year AI chip revenue forecast to $56 billion. For the third fiscal quarter, the company expects total turnover of roughly $29.4 billion. That implies the AI piece alone will need to hit about $16 billion — a staggering sequential jump that will test the company’s supply chain and design capacity. Investors will watch that number closely when next quarter’s report lands.

Meanwhile, the VMware acquisition is delivering the promised recurring revenue lift. Customers are being migrated to subscription licenses, creating a more predictable income stream. The software unit’s current miss may be a temporary transition pain rather than a structural weakness. The shares trade near their 52-week high and have more than doubled over the past twelve months, yet the relative strength index of 78 suggests the stock is technically overbought. A short-term pullback would not surprise chart watchers.

Broadcom’s dividend — $0.65 per share, payable at the end of June — remains a steady signal of management’s confidence. The company has beaten earnings expectations in multiple consecutive quarters, and the full-year guidance implies momentum is building. The Anthropic guarantee, while not on the balance sheet, further cements Broadcom’s role as the fabric weaver for the AI revolution: providing both the chips and the financial architecture that make those chips accessible.

For now, the analyst community sees little reason to sell. The gap between the current share price and the consensus target leaves room for upside, even if the next quarterly hurdle is the highest yet. Broadcom’s challenge will be proving that the $16 billion AI revenue mark is not a ceiling but a stepping stone.