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Luke Kawa3/7/25

Bank of America boosts Broadcom price target on growing list of hyperscaler customers

Bank of America is responding to Broadcom’s earnings beat and rosy guidance by raising its price target and estimates on the stock.

Analysts led by Vivek Arya lifted their earnings per share forecasts for the current year and the next two while boosting their price target to $260 from $250, which implies upside of about 35% for the shares.

“AVGO’s outperformance comes as a refreshing change after more contentious EPS calls from peers,” Arya & Co wrote. “We see a rising tide and expect ASICs [customized advanced chips] to command a 10-15% share in a $400-$500 billion long-term addressable opportunity.”

The chip designer is one of BofA’s top five picks in semis, along with Nvidia, Lam Research, Analog Devices, and Marvell Technology (which, like Broadcom, sells a lot of customized advanced chips, and got slammed this week after posting lukewarm earnings).

Broadcom’s ability to gain traction with new, large customers is bolstering the team’s confidence in the company.

“On top of existing three custom silicon customers (shipping today) and two potential customers currently in discussion (on track to tape out their XPUs this year), AVGO announced it is engaged with two additional customers, bringing total engagements to seven,” they added. “Every customer is a hyperscaler with a large enough internal installed base to potentially deploy 1 million plus XPU clusters for developing its own frontier model.”

Most analysts, for the record, feel optimistic about Broadcom as well, with the average price target sitting at $253. Per Bloomberg, 90% of the sell side that cover the name rate it a buy, while 10% deem it a hold.

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Amazon soars as 3Q earnings, sales beat Wall Street expectations

Amazon released earnings on Thursday.

Tasha Matsumoto

Big Tech sends stocks lower

Stocks were dragged down by yesterday’s Microsoft and Meta earnings as investors rotated out of Big Tech names.

Polar bear Sprinter bites into a pumpkin carved with Halloween faces in the Adventure Zoo in Hanover, Germany, 22 October 2015.

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J. Edward Moreno2h

Moderna soars after STAT reports “a buyout or a large partnership” are on the table

Moderna rose nearly 15% on Thursday after STAT reported that the company has flirted with the idea of tying up with a larger drugmaker.

The Covid vaccine-maker has talked to at least one large drugmaker on a deal "of significant scope" that could either be "a buyout or a large partnership," a source told STAT.

How Moderna, the company that helped save the world, unraveled

How Moderna, the company that helped save the world, unraveled

markets

OpenAI appears to be definitively answering its doubters’ biggest question

The AI boom is power constrained. It’s chip constrained.

But it will not be capital constrained.

That’s the top takeaway from media reports from The Wall Street Journal and Reuters that OpenAI is plotting an IPO.

That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.

My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.

The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”

A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”

And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.

Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.

OpenAI has started work on an IPO that could value the company at $1 trillion

OpenAI has started work on an IPO that could value the company at $1 trillion

That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.

My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.

The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”

A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”

And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.

Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.

markets

Max Knoblauch5h

Bearish options flow sends Lucid lower

Shares of luxury EV maker Lucid are being dragged down by bearish options trading on Thursday morning, with a put/call ratio of 5.8 as of 11:10 a.m. ET, versus the 1.05 it’s averaged over the prior 20 days.

If sustained, this would be the most bearishly tilted options activity for a single session for Lucid since June 21, 2024.

More than 32,000 put options have changed hands as of 11:10 a.m. ET, already above Lucid’s 30,794 20-day average for a full session. Lucid shares were down about 3% on Thursday morning.

On Wednesday, Lucid and Uber announced that their planned 20,000-robotaxi fleet would begin operations in the autonomously crowded streets of San Francisco starting next year. Earlier this week, Lucid also said it’s partnering with Nvidia to build autonomous vehicles for personal use.

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