Broadcom (AVGO) CEO Hock Tan said on Monday that capital, not chips, is now the biggest constraint on the company’s AI growth. Speaking at a panel in Singapore, Tan said Broadcom is getting past wafer and memory shortages, but funding will be the hardest limit as AI development continues.
That’s a shift. In September, Tan named power-ready data-center sites as the less predictable bottleneck. He also said Anthropic and OpenAI have shown their latest AI assistant models can earn significant revenue.
Broadcom Has Already Committed Financing
Tan isn’t describing someone else’s problem. Broadcom has agreed to lend Anthropic up to $42 billion, according to Anthropic’s IPO filing, as Reuters reported on October 1. That could cover about a third of Anthropic’s $125.2 billion, five-year TPU lease commitment. Bloomberg has also reported that Broadcom is lining up a roughly $60 billion debt package to fund chips for Anthropic and other customers.
Can Broadcom Afford It?
Close, but not in one go. Free cash flow climbed from $17.63 billion in fiscal 2023 to $26.91 billion in fiscal 2025, and $39.40 billion over the last twelve months. Funding the full $42 billion would take about 13 months of that cash, before a dollar goes to dividends or buybacks.
The balance sheet is tighter. Broadcom ended fiscal 2025 with $16.18 billion of cash and short-term investments against $66.46 billion of total debt. Cash has since risen to $24.0 billion as of August 2.
The Bottom Line on Broadcom’s Capital Problem
The cash flow is there to absorb a lot of this. The real exposure is concentration. Broadcom’s relationship with Anthropic spans compute supply, equipment leasing and committed financing. Anthropic lost more than $8 billion at the operating level in 2025 on about $4.6 billion of revenue. Handing the loan to a financing partner would ease the balance-sheet hit, not the dependence: Anthropic is on track to become Broadcom’s largest compute customer in 2027.
Want to see how Broadcom’s cash generation stacks up against its debt load over time? You can pull up the same free cash flow and balance sheet charts on TIKR for free. Learn more here.
So what is Broadcom stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what AVGO stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
