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Original headline: Was Broadcom CEO bullish or bearish on AI? ‘Gamblers’ comment creates storm
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- Broadcom Is Backing Anthropic and OpenAI With $92 Billion. Here's What It Means for Investors.
Broadcom could finance up to $92 billion in chip purchases for Anthropic and OpenAI, including $42 billion of senior debt for Anthropic backed by Broadcom guarantees and the residual value of its chips. An $18 billion junior debt tranche for Anthropic would have no Broadcom guarantee and must wait until Anthropic's financials are public, while Broadcom is also in talks to secure up to $50 billion for OpenAI to buy its custom XPUs. The article argues this strengthens Broadcom's competitive position in custom AI chips but adds risk, since XPUs are less versatile than GPUs and their resale value could be lower. OpenAI plans to deploy 1.3 gigawatts of XPUs next year and up to 5 gigawatts in 2028, while Anthropic is on track to become Broadcom's largest XPU customer next year.
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- Broadcom CEO: Investors are ignoring a key lesson from Warren Buffett
Broadcom CEO Hock Tan says many investors are ignoring Warren Buffett's principle of investing only in businesses they understand, treating the market almost like a casino. Speaking in Singapore, as reported by Bloomberg, Tan said many investors have “no clue” what they are buying and hold extreme expectations. The article notes that AI is harder to understand than earlier technology, making Buffett's advice harder to follow, though Tan remains bullish on Broadcom. He warned the industry could run out of capital and that AI profitability will depend on proving its usefulness to businesses, many of which may be “wasting money.” The article's takeaway is to avoid the casino-like aspects of the AI trade rather than the trade itself.
- Nvidia and Broadcom Narratives Define the AI Chip Landscape
NVIDIA reported $96.22B in revenue, more than doubling year over year, while Broadcom grew AI semiconductor revenue 221% by building custom chips for frontier labs. The article contrasts NVIDIA's complete AI systems, with Data Center revenue of $89.02B, up 117%, against Broadcom's custom XPUs, which made up 73% of its AI revenue and depend on six customers. NVIDIA says it has supply for only about 70% of demand, while Broadcom's roadmap includes Anthropic's five gigawatts of TPU v8i in 2027 and OpenAI's 1.3 gigawatts of Jalapeno. Both companies rely on Apollo and Blackstone vehicles for financing, and on October 14 NVIDIA fell 3.16% while Broadcom fell 3.1%. The author leans toward Broadcom, noting it is up just 0.59% year to date versus 18.94% for NVIDIA, with a forward P/E near 19x.
- Prediction: Broadcom Could Be the AI Winner After Nvidia
24/7 Wall St. rates Broadcom a buy with a 12-month price target of $425.56, which the article says implies 19.97% upside from $354.73. Broadcom has beaten EPS estimates for the ninth consecutive time, and fiscal Q3 revenue rose 85.5% year over year to $29.59B, with AI semiconductor revenue up 221% to $16.70B. Management guided AI semiconductor revenue to $21.70B next quarter and expects fiscal 2027 AI revenue of about $115 billion. Risks noted include having only six XPU customers, gross margin falling 210 basis points to 75%, and $59.6 billion of debt. The article puts NVIDIA near 46 times trailing earnings and AMD at about 224 times, and says Broadcom trades at a far lower multiple than either.
- Broadcom vs. Nvidia: If I Could Only Own One for the Next 5 Years, It Would Be This One
The author would choose Nvidia over Broadcom if limited to owning just one AI stock for the next five years, and says he keeps holding his shares. Nvidia's fiscal 2027 second-quarter revenue rose 106% to $96.2 billion and net income rose 126% to $59.7 billion, with data center revenue up 117% to $89 billion, and it projected third-quarter revenue of $108 billion. Its edge comes from a full ecosystem of GPUs, networking, software such as CUDA, and the Vera Rubin platform now moving into production. Broadcom, which makes custom ASIC chips and networking gear, reported fiscal 2026 third-quarter revenue of $29.6 billion, up 86%, and projected fourth-quarter revenue near $34.8 billion. The author sees Broadcom's custom chip business as promising but believes Nvidia has the stronger competitive position.
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