What Does The Anthropic IPO Mean For Broadcom Stock?
More on the Anthropic IPO: our Anthropic IPO storyline page collects our pieces on it.
You ask Claude to untangle a spreadsheet formula before a meeting. The answer may come back from a TPU, the AI chip Google develops with Broadcom. Anthropic now leases those chips by the gigawatt.
Anthropic plans to price its IPO on November 18, CNBC reported. What does that mean for Broadcom stock? The customer Broadcom expects to be its largest custom-chip buyer in 2027 is about to raise a pile of public cash.
Everyone knows Broadcom builds TPUs for Alphabet, and Alphabet said in October that it serves Anthropic both directly and via Broadcom. The filing sizes the Broadcom side: five-year TPU equipment leases with rent of about $161.2 billion, excluding interest. That is about 1.5 times Broadcom’s expected sales for the fiscal year that just ended, though Broadcom has handed parts of the leases to financing partners. That $161.2 billion bill reaches a portfolio of a few million dollars through Broadcom shares and S&P 500 funds at once; a free 15-minute call with a Trefis partner firm can answer: how much rides on one AI customer?
What Does The Data Say?
| Anthropic and Broadcom | Size |
|---|---|
| TPU equipment leases, five years | about $161.2B of rent |
| Notes Anthropic may issue to fund that rent | up to $42.0B |
| Broadcom’s purchase at the IPO | about $1.0B |
| Ironwood TPUs for Anthropic, 2026 | 1 gigawatt |
| TPU 8i for Anthropic, 2027 | 5 more gigawatts |
| 2028, in Broadcom’s line of sight | 10 more gigawatts |
Sources: Anthropic’s S-1/A; gigawatts from Broadcom’s September call.
Broadcom’s own business:
| Broadcom | Value |
|---|---|
| Revenue, quarter to August 2 | $29.6B, +86% |
| AI chip revenue, same quarter | $16.7B, more than tripled |
| Broadcom’s AI revenue outlook, fiscal 2027 and 2028 | about $115B, then $230B |
| Expected sales, fiscal 2027 | $174.3B, +64% |
| Price to fiscal 2027 expected earnings | 17.9x |
Expected figures are analyst averages; price at Wednesday’s close of $345.22.
Here is what the IPO changes. At the midpoint price, Anthropic expects about $84.6 billion of net proceeds from the IPO and private placement, more than the $70.7 billion of obligations due in the 12 months after September, on top of the cash it already holds. The tenant can pay a year’s rent. Broadcom says it uses outside partners such as Apollo and Blackstone to finance the hardware rather than lending directly, though the notes can be issued to Broadcom or a partner. The first $35 billion tranche, for Anthropic’s first gigawatt, closed in June.
The stock has swung hard: down 10.4% on November 5, then up 18.4% over the next four sessions. Our Wednesday piece, Buy, Sell Or Hold Broadcom Stock At $332?, named about $290 as a price to add at; the stock rose 4.0% that day instead. It still sits 28% below its June 2 closing high.
Gain per pain: yearly return above T-bills per unit of downside swings, five years to Wednesday. Higher is better.
| Stock | Anthropic tie | Gain per pain | Worst drop |
|---|---|---|---|
| Broadcom | $161.2B lease rent; $1.0B IPO buy | 2.32 | -41% |
| Nvidia | $10.0B IPO buy | 1.41 | -66% |
| TSMC | $0.5B IPO buy | 1.36 | -56% |
| Alphabet | $121.3B cloud deal; $10.0B IPO buy | 0.61 | -44% |
| Chip ETF (SMH) | none | 1.30 | -45% |
What Should You Do This Week?
Position, don’t predict. Broadcom has the best gain per pain here, yet its worst drop was still 41%. Size it, funds included, so a repeat wouldn’t force a sale. Watch two dated triggers: Anthropic’s final IPO price, and Broadcom’s results on December 9, for any AI outlook update. The risk is concentration. Broadcom expects one customer to lead its custom-chip sales next year, and Anthropic says its own growth rate may decline significantly.
What’s The Bigger Idea?
A supplier is only as strong as its customer’s wallet. Until now, Broadcom’s expected largest custom-chip buyer has been a private company. After the IPO, it can raise money in the public market. The chip orders are the same; the credit behind them is about to change.
What Should You Ask Next?
- Anthropic IPO: What It Means For Amazon, Google And Nvidia Stock
- What Does The Anthropic IPO Mean For Alphabet Stock?
How Much Of Your Money Rides On One Chip Customer?
For families with seven figures invested, Broadcom sits in S&P 500 funds as well as in direct shares. Count it all in a free 15-minute call with a Trefis partner firm.
For questions about this article or underlying research, email help@trefis.com.