Broadcom (AVGO) may be one of the most underrated stocks in the stock market. If ordinary investors were asked to list the ten largest companies in the world by market capitalization, Broadcom would likely be overlooked or omitted. Investors have not yet realized that Broadcom is already a $1.7 trillion enterprise, and after the substantial growth it is expected to experience, its value could be far greater than that. Broadcom is capturing a significant share of the AI computing market through its custom AI chips, an area that could become the main driver pushing its stock price to repeated new highs in the coming years. So, what will a $1,000 investment be worth by 2028?
ASIC stands for Application-Specific Integrated Circuit, and it is a rapidly growing segment of Broadcom’s business. ASICs have existed in many industries for a long time, used to perform specific tasks, but only recently have they entered the AI field, and Broadcom is one of the most important players in this area.
Currently, GPUs dominate the AI computing landscape. GPUs are suitable for a variety of workloads, but they are expensive, and many GPUs run only one type of workload throughout their entire service life, resulting in some of their powerful capabilities being underutilized. The ASICs (custom AI chips) designed by Broadcom are specifically intended to replace GPUs in repetitive tasks. By designing specifically for particular workloads, Broadcom can achieve better performance at a lower cost, creating a win-win situation for all parties.
However, Broadcom must design ASICs for specific workloads, so it cannot sell them directly on the market. It needs to work directly with AI companies, designing computing units according to their specifications, and then selling the finished products back to customers. More and more AI companies are adopting this approach, and Broadcom’s major customers include Alphabet, Meta Platforms, OpenAI, and Anthropic. These four companies are increasingly purchasing AI chips tailored to their workloads, thereby driving Broadcom’s business growth.
In the third quarter of fiscal year 2026 ended August 2, Broadcom achieved $16.7 billion in AI semiconductor revenue, a year-over-year increase of 221%. The growth momentum is strong, but Broadcom is far from stopping there.
The company expects its custom AI chip sales to truly accelerate, with AI semiconductor sales projected to exceed $65 billion in fiscal year 2026, rise to $115 billion in fiscal year 2027, and reach $230 billion in fiscal year 2028. This rapid growth trajectory indicates that Broadcom will deliver enormous returns as a stock.
With its rapid growth and solid execution, Broadcom has already ranked among the best large technology companies. Therefore, a long-term price-to-earnings valuation multiple of 30 times seems reasonable. Currently, Wall Street analysts’ average earnings-per-share estimate for Broadcom in fiscal year 2028 is $28.08. At a 30 times price-to-earnings ratio, the stock price would reach $842. The current stock price is approximately $360, implying potential upside of 134%.
This would turn a $1,000 investment into $2,340 in a little more than two years. This return on investment is quite substantial, and it also makes Broadcom a top AI stock worth buying right now.
