Broadcom Drops 6% on $370 Billion AI Debt Warning as AMD Gains 4%
Updated
Updated · Yahoo Finance · Aug 14
Broadcom Drops 6% on $370 Billion AI Debt Warning as AMD Gains 4%
3 articles · Updated · Yahoo Finance · Aug 14
Summary
Broadcom fell 6% to $390.69 after Bank of America highlighted a financing vehicle that could reach $370 billion in senior debt by mid-2029, including about $150 billion of issuance in 2027.
The vehicle is off Broadcom's balance sheet and leases custom AI accelerators to customers, but Broadcom has agreed to backstop lease payments for five years with maximum exposure of up to $29 billion on the initial transaction.
AMD rose 4% to $502.95 after Baird issued a Street-high $1,250 price target tied to its accelerator roadmap, underscoring how investors are rewarding AI demand while scrutinizing funding structures.
Broadcom's underlying AI business remained strong despite the selloff: fiscal Q2 revenue rose 47.9% to $22.19 billion, AI chip revenue jumped 143%, and management guided to $16 billion in AI semiconductor revenue this quarter.