Everyone Loves Broadcom (AVGO) Stock. One Analyst Just Changed His Mind.

TLDR

• Seaport Research’s Jay Goldberg downgraded AVGO from Buy to Neutral, citing AI industry strain
• Goldberg flagged a filing line suggesting Broadcom may help fund an Anthropic data center
• Only 3 of 53 FactSet-tracked analysts now hold neutral ratings on the stock
• Broadcom announced deals with both Google and Anthropic earlier this week
• The Google deal runs through 2031 and covers TPU development and AI rack supply

Broadcom just landed two headline-grabbing deals with Google and Anthropic. The market loved it — AVGO jumped 6% on Tuesday. But Seaport Research analyst Jay Goldberg read the fine print and didn’t like what he saw.

Broadcom Inc., AVGO

Goldberg cut his rating on Broadcom to Neutral from Buy, putting himself squarely in the minority. Just three of the 53 sell-side analysts tracked by FactSet hold neutral-equivalent ratings on the stock. The other 50? Still bullish.

His concern isn’t that Broadcom’s business is struggling. He’s clear that it isn’t. The company is on track to grow revenue around 60% this year, driven by strong demand for its custom ASIC chips from customers like Google and Anthropic. That’s not the issue.

The issue is a single line buried in a Broadcom regulatory filing. The company disclosed that Anthropic will access roughly 3.5 gigawatts of compute capacity through Broadcom. The filing also noted that “the parties are in discussions with certain operational and financial partners” in connection with that deployment.

Goldberg read that as a sign Broadcom could be involved in financing Anthropic’s data center build. “The extent to which all the leading chip vendors are having to provide funding and/or backstops to their customers points to the industry’s strain,” he wrote.

Broadcom and Anthropic did not immediately respond to comment requests.

AI Chip Vendors Caught in a Financing Bind

Goldberg’s broader argument is that Broadcom, Nvidia (NVDA), and AMD (AMD) are all running into the same wall. Gigawatt-scale data centers cost enormous sums, and the vendors supporting them are increasingly getting pulled into the financing side of these deals.

He said Broadcom’s involvement is smaller than Nvidia’s, but that it still points to a market under pressure from the sheer scale of capital needed to build out AI infrastructure.

The Google deal, announced earlier this week, has Broadcom working on tensor processing unit development through 2031. Broadcom will also supply networking components for Google AI racks over that same period.

But Goldberg flagged that Taiwan’s MediaTek could take a slice of the TPU business this year — not enough to derail Broadcom’s trajectory, but potentially enough to give Google some negotiating leverage.

Gains Already in the Price

AVGO has gained 114% over the past 12 months. It rose 6% on Tuesday following the deal announcements and was up around 4% again in Wednesday premarket trading, boosted by market-wide optimism following reports of an Iran cease-fire deal.

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