--- title: "Broadcom Stock (AVGO) Slips as Credit Default Swaps Jump 28 Basis Points – Here's Why" type: "News" locale: "en" url: "https://longbridge.com/en/news/296828309.md" description: "Broadcom (AVGO) stock declined as its five-year credit default swaps rose 28 basis points, reflecting heightened investor concern over the company's balance sheet risks. This increase exceeds peers like Oracle and SpaceX, driven by Broadcom's involvement in a $60 billion AI financing package for Anthropic. Analysts warn of 'phantom leverage' from guarantees and leases, fearing exposure during an AI downturn. Despite these credit concerns, Wall Street maintains a Strong Buy consensus with a $509.30 price target." datetime: "2026-08-24T20:37:51.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296828309.md) - [en](https://longbridge.com/en/news/296828309.md) - [zh-HK](https://longbridge.com/zh-HK/news/296828309.md) generator: "portal-rs" --- # Broadcom Stock (AVGO) Slips as Credit Default Swaps Jump 28 Basis Points – Here's Why Shares of AI chipmaker Broadcom (AVGO) fell today as bond investors price in more risk. According to *Bloomberg*, the yield on Broadcom's 5.15% bonds due in 2031 has risen about 14 basis points so far in August. Furthermore, its five-year credit default swap, which is essentially insurance against Broadcom failing to repay debt, has increased by 28 basis points. That move is larger than the increases seen at software giant Oracle (ORCL) and rocket company SpaceX (SPCX). The concern comes as Broadcom discusses another AI financing package worth more than $60 billion. ### Summer Sale - Claim 70% Off TipRanks Explore ORCZ for 2X short leverage on ORCL The proposed deal would help AI company Anthropic and other customers get access to Broadcom chips. Broadcom could guarantee part of the senior secured debt, which would make lenders more comfortable providing the money. Importantly, this would not be the first time Broadcom has used its balance sheet this way. Earlier this year, the company supported most of a $35 billion debt package. Investment firms Apollo Global Management (APO) and Blackstone (BX) helped finance custom Broadcom AI chips that were then leased to Anthropic. That structure can benefit Broadcom because customers gain access to more financing. As a result, they can purchase more AI infrastructure. However, the risk is that Broadcom is also taking responsibility for part of the financing if something goes wrong. ## **Bond Investors Are Watching Broadcom's Hidden AI Exposure** That is why Broadcom's credit risk has started to receive more attention. Tony Trzcinka of Impax Asset Management told *Bloomberg* that the increase in Broadcom's credit default swaps appears more connected to its own balance sheet than to general worries about AI spending. Indeed, the concern is what could happen during an AI downturn. If customers struggle financially, Broadcom could eventually have to make good on guarantees while demand for its chips becomes weaker. Separately, JPMorgan (JPM) strategist Tarek Hamid described this type of exposure as "phantom leverage." Some obligations may not appear like normal debt on a company's balance sheet today. Still, leases can create future commitments. Purchase agreements and financial guarantees can add even more exposure. ## **Is AVGO Stock a Good Buy?** Turning to Wall Street, analysts have a Strong Buy consensus rating on AVGO stock based on 24 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AVGO price target of $509.30 per share implies 42% upside potential. 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