Broadcom Upgraded to Outperform by Macquarie on Anthropic AI Chip Demand

Macquarie has upgraded Broadcom (NASDAQ: AVGO) to an Outperform rating, arguing that the semiconductor giant is poised to become a primary beneficiary of artificial intelligence developer Anthropic's massive computing infrastructure expansion. The bank raised its price target on the stock by 12% to $490, implying a potential total shareholder return of approximately 35%.

Anthropic to Drive Growth

At the core of the upgrade is the forecast that Broadcom will become a critical supplier for Anthropic. In a note to clients, Macquarie analyst Arthur Lai projected that the AI firm will purchase more than $40 billion in components from Broadcom in fiscal 2028.

Lai described Broadcom as the "cleanest listed proxy for Anthropic's compute ramp." This anticipated revenue stream is expected to more than compensate for the potential loss of business from Google, which has been a key risk factor for investors.

Google Risk Already Priced In

Macquarie contends that concerns over Google developing its own chips in-house have largely been factored into Broadcom's current stock price. The analyst pointed to the stock's roughly 24% slide from its 2026 high and Google's direct investment in MediaTek as evidence that the market has already digested this threat.

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Broadcom's recent third-quarter results were in line with expectations, with revenue rising 33% quarter-over-quarter to $29.6 billion. While gross profit margin dipped two percentage points to 75.0% due to a higher mix of lower-margin AI semiconductor sales, net profit still beat Macquarie's estimates by 4%.

Diversifying AI Customer Base

The investment bank also highlighted Broadcom's increasingly diverse customer base as a key strength that reduces dependency on any single client. According to the note, the company's growth now relies more evenly on six major XPU customers.

Macquarie noted that Broadcom's management expects OpenAI to become its second-largest XPU customer by fiscal 2028 and that Meta Platforms is set to ship three generations of its custom MTIA chip using Broadcom technology. Lai concluded that Broadcom "dominates the rapid-growth AI ASIC market," while its software business provides margin stability and recurring revenue.