One Wall Street Analyst Says This Stock Is the Best Way to Invest in Anthropic and OpenAI. He's Right.
D.A. Davidson analyst Gil Luria sees chipmaker Broadcom as one of the best ways to invest in the growth of Anthropic and OpenAI.
D.A. Davidson analyst Gil Luria believes that investing in chip designer Broadcom (AVGO -0.06%) is the best way to profit from the anticipated IPOs of AI companies Anthropic and OpenAI. Luria argues that Broadcom will become the largest ASIC (application-specific integrated circuit) customer for both companies in the coming years, making it a cheap way to capitalize on their success.
Anthropic already has $131 billion in cash reserves and 50% gross margins, while OpenAI's upcoming IPO will raise additional capital. Broadcom is currently trading at a forward P/E of 16 times its 2027 adjusted EPS estimates, which the analyst considers undervalued given its projected growth. He has upgraded Broadcom to a "buy" and raised his price target from $350 to $400.
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