AVGO: Broadcom stock rises after DA Davidson upgrade to Buy

What happened. On 27 October 2026 DA Davidson analyst Gil Luria upgraded Broadcom from Neutral to Buy. He raised the price target to $400 from $350. Per CNBC, that is nearly 22% above Monday's close. AVGO shares rose more than 3% in premarket trading.

Why the analyst changed his view. On Monday Anthropic filed an S-1 and said it plans to list on Nasdaq under the ticker ANT. Luria told clients that, in his reading, the IPO will proceed, Anthropic will raise its capital, and next year OpenAI will raise more in its own IPO. That would let Broadcom meet expectations for the next couple of years. At 16 times 2027 earnings per share, he says, AVGO is trading as if the chances of that are near zero.

The numbers he takes from the filing. Per Investing.com, Luria points to $131 billion in cash at Anthropic, a $161 billion relationship with Broadcom, and gross margins of about 50% on net revenue. He considers that margin healthy enough to justify the growth. We have not seen the filing itself and relay these figures from that source.

Broadcom's role. The company designs custom AI chips for large customers. Per Investing.com, its growth is tied to Anthropic and OpenAI, which are set to become its largest customers for those chips, and market skepticism about both has risen recently. Per CNBC, Broadcom said on Monday that Bank of America, Blackstone, Citi and Morgan Stanley have set up a special purpose vehicle that will finance $63 billion of Broadcom AI chips for Anthropic. Earlier this month Anthropic said it will borrow up to $42 billion from Broadcom.

What others say. Raymond James analyst Simon Leopold wrote that the filing supports the size and longevity of the opportunity. He also noted that Broadcom's possible $42 billion financing commitment, which may be transferred to a financial partner, is a less appreciated financial exposure. Per LSEG data, 48 of the 51 analysts covering the stock rate it buy or strong buy. The shares are down nearly 5% so far this year.

What is not known. We do not know where the shares will close, whether Anthropic's IPO will happen, or when OpenAI will list. The rating and price target are the analyst's opinion. This is not advice to buy or sell anything.

Hechos confirmados

• On 27 October 2026 DA Davidson upgraded Broadcom (AVGO) from Neutral to Buy and raised its price target to $400 from $350; the note's author is analyst Gil Luria.^[1][2]
• The $400 target is nearly 22% above Monday's close.^[2]
• Broadcom shares rose more than 3% in premarket trading.^[2]
• On Monday Anthropic said in an S-1 filing that it plans to list on Nasdaq under the ticker ANT.^[2]
• Luria: his reading of Anthropic's filing leads him to believe the IPO will proceed, Anthropic will raise its capital, and next year OpenAI will raise more in its own IPO, allowing Broadcom to meet expectations for the next couple of years.^[1][2]
• Luria says that at a 16x multiple on 2027 earnings per share, AVGO is trading as if the chances of that are near zero.^[1][2]
• Luria cites the filing: $131 billion in cash at Anthropic, a $161 billion relationship with Broadcom, and gross margins of roughly 50% on net revenue.^[1]
• Nvidia, Micron and Broadcom trade at 5 to 16 times 2027 earnings per share; the rest of the AI semiconductor group trades at 20 to 40 times.^[1]
• Broadcom's growth is tied to Anthropic and OpenAI, which are set to become its largest custom chip customers; market skepticism about both has risen recently.^[1]
• Bank of America, Blackstone, Citi and Morgan Stanley created a special purpose vehicle that will finance $63 billion of Broadcom AI chips for Anthropic.^[2]
• Anthropic said earlier in October that it will borrow up to $42 billion from Broadcom.^[2]
• Of the 51 analysts covering Broadcom, 48 rate it buy or strong buy (LSEG data); the shares are down nearly 5% year to date.^[2]

Implicaciones

• ConfirmadoThe upgrade rests on Anthropic's filing: it ties Broadcom's shares most tightly to the fate of the Anthropic and OpenAI IPOs.
• Nuestra lecturaIf the Anthropic or OpenAI IPO stalls or slips, the analyst's case would weaken.
• Nuestra lecturaThe $63 billion financing makes it more likely that Anthropic's purchases from Broadcom go ahead as planned (the view of a Wolfe Research analyst quoted by CNBC).

Todavía no se sabe

• Where AVGO shares close on 27 October.
• Whether Anthropic's IPO happens and when OpenAI lists.
• We have not seen the S-1 itself: figures from it come via Investing.com.

A quién afecta

US, Worldwide. People who follow Broadcom, AI chips and the Anthropic IPO

Fuentes

1. Investing.com (via Yahoo Finance): Broadcom: DA Davidson upgrades AVGO, says Anthropic S-1 shows AI cycle isn't over 27 de octubre de 2026 · medios
2. CNBC: Wall Street sees this chip stock as the big winner from the Anthropic IPO 27 de octubre de 2026 · medios