Broadcom Gets a Stock-Target Increase. Analyst Thinks Anthropic Is a Big, New Customer.

A Broadcom Ethernet controller. The stock is up 48% this year, compared with a 35% rise for the iShares Semiconductor exchange-traded fund. (Dreamstime)

Key Points

• Mizuho Securities analyst Vijay Rakesh raised Broadcom’s stock-price target to $435 from $430, reaffirming an Outperform rating.
• Rakesh believes Anthropic is Broadcom’s fourth customer, potentially generating $10 billion in revenue from AI server racks by the second half of 2026.
• Anthropic raised $13 billion in new capital in September, valuing the startup at $183 billion, with an annualized revenue run rate exceeding $5 billion.

Broadcom may have won an artificial-intelligence model as an important new customer, according to Mizuho Securities.

On Monday, analyst Vijay Rakesh raised his stock-price target for Broadcom shares to $435 from $430. He also reaffirmed his Outperform rating for the company.

After doing some channel checks, “we now believe Anthropic is AVGO’s fourth customer, ramping to $10B of revenue with ‘AI [server] Racks’ in 2HF26E,” he wrote. Last month, Broadcom announced it had won a $10 billion order for AI chips from a new customer, but didn’t disclose the buyer’s identity.

Broadcom shares were down 2% to $342.17 in early trading Tuesday.

Anthropic and Broadcom didn’t respond to requests for comment asking if the companies are working together.

The analyst believes the addition of Anthropic, a leader in advanced AI models, will help Broadcom boost long-term revenue growth. Anthropic is in position to spend heavily.

In September, Anthropic said it raised $13 billion in new capital in a deal that valued the start-up at $183 billion. At the time, the company said its revenue had reached an annualized run rate surpassing $5 billion, with more than 300,000 business customers. That compares with a rate of $1 billion at the beginning of the year.

Broadcom helps technology companies design custom chips for AI using its high-end artificial intelligence application-specific integrated circuits, or ASICs.

Broadcom stock is up 48% this year, compared with a 35% rise for the iShares Semiconductor exchange-traded fund.

Write to Tae Kim at tae.kim@barrons.com