Broadcom sinks 6% on $370B AI debt estimate; AMD rallies 4% on $1,250 price target

Broadcom's stock slumped 6% to $390.69 in early Friday afternoon trading after Bank of America analyst Tom Curcuruto estimated that the company's chip-financing vehicle could reach $370 billion of senior debt by mid-2029 at 20-gigawatt scale, including roughly $150 billion of new issuance in 2027 alone. The estimate refers to an off-balance-sheet financing vehicle that Broadcom launched in June through a partnership with Apollo and Blackstone, which initially raised $35 billion to fund more than 1 gigawatt of compute for Anthropic. Per Broadcom's latest 10-Q filing, an investor partner assumed the purchase and lease agreements, and Broadcom agreed to backstop lease payments for five years, with maximum exposure of up to $29 billion on the initial transaction. The $370 billion itself is not Broadcom's debt; rather, it reflects the vehicle's cumulative senior debt as it scales toward supporting 20 gigawatts for frontier AI labs through 2028. Broadcom's underlying fundamentals remained strong: fiscal Q2 2026 revenue reached $22.19 billion, up 47.9% year over year, with AI chip revenue jumping 143%, and management guided to $16 billion of AI semiconductor revenue for the current quarter. Polymarket traders assign a 94% chance Broadcom will top $15 billion in AI revenue this quarter and a 78% chance of exceeding $16 billion, suggesting the stock decline targets the financing structure rather than demand. Meanwhile, Advanced Micro Devices stock climbed 4% to $502.95 after Baird analyst Tristan Gerra doubled his price target to a Street-high $1,250 from $625, maintaining an Outperform rating. His model projects AMD's AI GPU platform revenue reaching $147 billion by 2030 on 15% share of the data center AI accelerator TAM. Bank of America also raised its 2030 server CPU market forecast to more than $210 billion, up from $170 billion earlier in the week, and kept AMD as its top pick. AMD's recent earnings report, issued Aug. 4 for Q2 2026, showed revenue of $11.54 billion (up 50.1% year over year) and Data Center revenue more than doubling to $6.72 billion, but the stock initially fell because gross margin guidance for Q3 2026 held flat at 56%. Options positioning shows AMD's put-to-call open interest ratio has climbed to 1.15 and its 20-day Chaikin Money Flow reads -0.142, the weakest of 10 major chip names, while NVIDIA, Broadcom, Taiwan Semiconductor, and Qualcomm show accumulation, indicating hedging even as sell-side targets rise. The sector-wide reaction confirms that the divergence is a single-name repricing: Intel stock is down 2% and the iShares Semiconductor ETF (SOXX) is down 0.7%, while Broadcom slides 6% and AMD climbs 4%, signaling that today's move reflects analyst calls and balance sheet assessments rather than the broader AI trade. The financing backdrop looms large. NVIDIA announced this week a plan to collectively finance AI computing deals totaling roughly $500 billion alongside Goldman Sachs, Blackstone, Apollo, KKR, BlackRock, and Brookfield, with Jensen Huang clarifying that NVIDIA's support would cover as much as 25% of an opportunity and no deals signed at the time of announcement. Broadcom's structurally similar arrangement, anchored by the same Apollo and Blackstone partners, now carries a $370 billion debt estimate—and the stock fell. The contrast raises a key question for investors: whether vendor-backed AI financing is a source of reassurance or risk, and how quickly that narrative can shift.