Broadcom (NASDAQ: AVGO) shares climbed more than 2.7% in Friday trading as Wall Street banks prepared a potential $60 billion financing package for artificial intelligence chip infrastructure, according to a Bloomberg News report.
The report indicated that banks in Broadcom's syndicate are preparing to market $42 billion of Class A senior-secured debt, while Blackstone is leading an additional $18 billion tranche of Class B junior debt. The financing has been in the works for several weeks, according to people familiar with the matter.
Investors are closely watching the potential deal as they assess whether financial markets remain willing to fund the rapid expansion of AI infrastructure. Broadcom is seeking to expand sales of its chips and data-center equipment as AI companies such as Anthropic require increasing computing capacity.
Financing package details
Banks involved in the deal are expected to send syndication letters for the $42 billion Class A senior-secured tranche, per Bloomberg's sources. Blackstone is leading the $18 billion Class B junior debt tranche and has committed $9 billion from various funds, with plans to syndicate the remainder.
The potential financing could help companies including Anthropic gain access to chips and other infrastructure needed to expand their AI operations. Reuters reported on Thursday that Anthropic's IPO filing showed Broadcom had agreed to lend the AI company up to $42 billion to finance infrastructure spending.
The proposed package adds to the hundreds of billions of dollars already raised to finance AI infrastructure. While much of that funding has gone towards data centers, financing for chips and servers has also increased. Nvidia announced a partnership with six major financial firms in August to mobilize more than $500 billion for AI infrastructure, including financing to help customers purchase its chips.
UBS maintains Buy rating
Broadcom also received continued support from UBS, which reiterated its Buy rating and maintained a $470 price target following a virtual non-deal roadshow with CEO Hock Tan and CFO Kirsten Spears. UBS analyst Timothy Arcuri said the firm saw a strong upward bias to Broadcom's fiscal 2027 and 2028 AI revenue guidance following discussions with management.
Broadcom's revenue increased 49% over the 12 months through the third quarter of fiscal 2026, while analysts are forecasting 66% revenue growth for fiscal 2026. Arcuri also said investor concerns surrounding Broadcom's flagship TPU program were misguided.
Broadcom said engagement remains strong for the next two generations of its XPU program following the v8i ramp in 2027.
Broadcom outlines financing role
Broadcom said it is adding more SRAM and ARM CPU cores to its XPU devices for orchestration and management, increasing the complexity of the chips and making them more difficult for in-house design teams to replicate, according to UBS.
On financing for its initial frontier-lab customer, Broadcom said it "sells chips, not financial products" and is not providing direct financing. Instead, the company is contributing to a platform that allows the customer to access third-party lenders. Broadcom is providing residual-value guarantees only for selected tranches, which management described as a small fraction of the overall financing.
UBS said the comments were consistent with previous discussions and maintained its estimates and $470 price target.
This article is for informational purposes only and does not constitute financial advice.
