Broadcom (NASDAQ: AVGO) may be one of the most underrated stocks in the stock market. If you asked an average investor to rank the 10 largest companies in the world by market cap, it would probably get left out or missed most often. Investors don’t realize how big Broadcom already is (it’s a $1.7 trillion business), but after the massive growth it’s expected to undergo, it could be worth far more.
Broadcom is tapping into a major share of the AI computing market with its custom AI chips, and this sector could be a major driver of growth, pushing Broadcom’s stock to new heights over the next few years.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
But what will a $1,000 investment be worth by 2028? Let’s crunch the numbers, as it could be one of the best investments to make right now.
What are ASICs?
A rapidly growing part of Broadcom’s business is ASICs, or application-specific integrated circuits. ASICs have been around for a long time in many industries to do specific tasks. However, they’ve only recently entered the AI scene, and Broadcom is one of the biggest names in the space.
Currently, GPUs dominate the AI computing landscape. These units are fantastic for a wide variety of workloads, but aren’t cheap. Furthermore, many GPUs run one type of workload throughout their service life, so some of these incredible capabilities go unused.
In their place, Broadcom is designing ASICs, or custom AI chips, to replace GPUs in repetitive tasks. By designing them specifically for a workload, Broadcom can achieve better performance at a cheaper price tag — a win-win for everyone involved.
However, Broadcom must design them for a specific workload, so it cannot just offer ASICs on the marketplace. Instead, it must partner directly with AI firms to design a computing unit to their specs, then sell it back to them as a completed unit. An increasing number of AI firms are doing this, with some of Broadcom’s biggest clients including Alphabet, Meta Platforms, OpenAI, and Anthropic. These four companies are increasingly purchasing custom AI chips tailored to their workloads, boosting Broadcom’s business.
During Q3 of fiscal year 2026, ending Aug. 2, Broadcom delivered $16.7 billion in AI semiconductor revenue, up 221% year over year. That’s some solid growth, but Broadcom is far from done.
