Broadcom stock gains after $3B debt buyback; JPMorgan upbeat

Broadcom expanded its cash tender offers to repurchase up to $3 billion of senior notes, up from an initial $2.5 billion cap. The company accepted roughly $2.9 billion of the approximately $5.5 billion in notes tendered. Initial settlement is scheduled for June 18, with guaranteed-delivery settlement on June 23. Barclays Capital and Citigroup are acting as dealer managers and D.F. King is the tender and information agent.

The tender covered six bond series with maturities from 2030 to 2038 and coupon rates including 4.926%, 4.900%, 5.050%, 5.200% and 5.150%. By increasing the cap, Broadcom accepted all validly tendered 4.926% Senior Notes due 2037 and 4.900% Senior Notes due 2038, including notes submitted under guaranteed delivery. The six series represent about $9.4 billion of principal outstanding.

Broadcom shares rose about 3.5% in trading and closed at $407.81. The stock traded roughly 10.7% above its 100-day simple moving average and 13.3% above its 200-day simple moving average, while remaining slightly below its 50-day average. The 14-day relative strength index stood near 50, a neutral reading that indicates balanced buying and selling pressure.

JPMorgan analyst Harlan Sur wrote that Broadcom’s AI growth outlook remains intact and rejected reports that Alphabet’s next-generation Tensor Processing Unit v9 program had been delayed or canceled. JPMorgan’s research projects TPU v9 on track for volume production in calendar 2028 and estimates Broadcom maintains a lead of more than 18 months over Google’s internal chip efforts. The firm noted Broadcom’s five-year agreement with Google covers participation across four TPU generations and expects rising annual TPU revenue through 2031.

JPMorgan projects Broadcom’s AI revenue could increase two to 2.5 times in 2027 and then double again in 2028, and recommended investors be “aggressive buyers at current levels.” The firm highlighted Broadcom’s position in advanced packaging design, its intellectual property portfolio and its execution record.

Broadcom said the purchases will trim part of its outstanding debt and lower future interest costs.