Key Takeaways
- Broadcom (AVGO) shares declined 4.77% on Monday following comments from Anthropic’s CEO Dario Amodei advocating for reduced speed in AI model advancement
- CEO Hock Tan reaffirmed the company’s aggressive AI revenue projections: $115 billion for fiscal 2027, escalating to $230 billion by fiscal 2028
- Tan rejected concerns about an AI slowdown, characterizing compute demand as “very strong and very durable”
- By 2027, Anthropic is projected to surpass Google as Broadcom’s top custom chip client
- Following Tan’s televised remarks, AVGO gained 0.4% in extended trading; Mizuho analysts viewed the semiconductor sector retreat as a purchase opportunity
Broadcom (AVGO) finished Monday’s session at $344.72, registering a 4.77% decline, as remarks from Anthropic CEO Dario Amodei advocating for a deceleration in AI model advancement triggered anxiety among chip sector investors.
Amodei’s weekend commentary received backing from both OpenAI’s Sam Altman and Elon Musk, intensifying the market downturn. The iShares Semiconductor ETF plummeted 5.6% during the trading day, with data center-focused companies experiencing similar pressure.
The spotlight intensified on Broadcom given that Anthropic represents one of its most significant custom silicon partners. This relationship rendered AVGO uniquely vulnerable to discussions surrounding reduced investment in cutting-edge AI research.
CEO Hock Tan responded forcefully. During his appearance on CNBC’s “Mad Money” Monday night, he offered an unequivocal response when questioned about potential changes to Broadcom’s projections.
“No, not in the least,” Tan stated.
He maintained the guidance originally presented during Broadcom’s fiscal Q3 earnings announcement on September 2. These projections anticipate AI semiconductor revenue reaching $115 billion in fiscal 2027, subsequently doubling to $230 billion by fiscal 2028. The 2028 projection particularly stood out as a highlight from that quarterly report.
Inference Computing Positioned as Sustainable Revenue Source
Tan made a clear differentiation between AI model training and inference—the continuous deployment of AI models within commercial applications and services. He characterized inference demand as a stable growth engine irrespective of ongoing training-related discussions.
“I don’t know about training, but when you want to productize inference, I see it continuing to be very, very strong,” Tan explained.
He also verified that Anthropic is positioned to become Broadcom’s largest custom chip client during fiscal 2027, displacing Google, which has traditionally maintained that status through its Tensor Processing Unit collaboration with Broadcom.
Tan didn’t completely disregard AI safety considerations. He acknowledged that protective measures serve an important purpose, but characterized AI as a productivity enhancement rather than an existential threat. He drew parallels between its long-term influence and the Industrial Revolution.
“It is still at the end of the day a tool that will make our society, humanity, reach a better level of living,” Tan remarked.
Presidential Intervention and Analyst Optimism
The conversation extended well beyond Broadcom’s executive suite. During Monday’s All-In Summit in Los Angeles, President Trump placed a live speakerphone call to Nvidia CEO Jensen Huang to counter AI regulation anxieties. Trump characterized fears of an AI uprising as a “hoax” and contended that excessive regulation would primarily advantage China.
Subsequently, Trump took to social media, branding himself the AI “Hoax Buster.”
Mizuho issued research indicating that the substantial decline in AI-related chip stocks appears exaggerated. The firm identified Broadcom, Micron, Lam Research, and additional companies as favorably positioned despite the market retreat, noting that discussions about slowing frontier AI development don’t indicate any genuine shift in data center capital expenditure.
AVGO climbed approximately 0.4% during after-hours trading following Tan’s CNBC interview. TipRanks analysts continue to assign a Strong Buy consensus rating to the stock, with an average price target of $519.21, suggesting approximately 51% potential upside from Monday’s closing price.
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