Broadcom Falls 5.8% as BofA Puts $370B of Debt Behind Its AI Chips
U.S. markets are closed for the weekend; the next open is Monday, August 17 at 9:30 a.m. ET (4:30 p.m. in Istanbul). Even so, the most-discussed story of the last session was not an earnings report or a data print but a question about how the AI buildout is being financed. Bank of America analyst Tom Curcuruto estimated that AI XPV, the off-balance-sheet financing vehicle Broadcom launched in June, could carry $370B of senior debt by mid-2029 at 20-gigawatt scale, requiring roughly $150B of new issuance in 2027 alone. The mechanics matter: the debt sits with the vehicle rather than with Broadcom, the initial $35B round led by Apollo and Blackstone funds more than 1 gigawatt of capacity for Anthropic, and Broadcom backstops customer lease payments for five years — maximum exposure on that first transaction is $29B. The number never shows up on the balance sheet; it sits there as a contingent liability, and that is precisely what unsettled investors.
The reaction was sharp: Broadcom closed Friday down 5.8% at $393.60, slipping below $400, while the iShares Semiconductor ETF (SOXX) lost only 0.7% — a company-specific move, not a sector one. AMD went the other way in the same session: Baird's Tristan Gerra doubled his target to a Street-high $1,250 from $625, arguing reaches $147B of AI GPU revenue and 15% market share by 2030; the stock rose 4% to $502.95. The third thread runs through memory: set a long-term gross margin target of roughly 80%, below today's 84.6%, at its August 13 investor day, and still gained about 22% over two sessions on the strength of a $93.9B contract book — upgraded the stock to Overweight with a $2,250 target, RBC lifted its target to $1,600 from $1,300 and to $1,550 from $1,400. Asia priced the same theme overnight: the KOSPI closed Friday up 2.41% at a record, capping an 11.5% week, with SK Hynix up 6% and Kioxia up 7%.
