Prediction: Broadcom Stock Will Reach $450 By the End of the Year

Broadcom (NASDAQ: AVGO) is 1 of the much fashionable tech stocks close now. Its products are surging successful popularity, and tin beryllium seen arsenic a viable alternate to graphics processing units (GPUs) from Nvidia (NASDAQ: NVDA). That's a monster of a institution to vie against, but Broadcom is succeeding acknowledgment to its custom-designed AI chips.

Although Broadcom's banal is astir $330 close now, I deliberation it could scope $450 by the extremity of the year. That's astir a 36% upside -- easy a market-crushing stock. So, however tin Broadcom predominate 2026? Simple. It conscionable needs to support doing what it has been doing.

Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »

This institution isn't conscionable AI chips and connectivity switches. It has a divers lineup of software, mainframe hardware, and adjacent cybersecurity. But the astir fashionable part by acold is Broadcom's AI semiconductors.

Broadcom has emerged into the AI computing country acknowledgment to its ASICs (application-specific integrated circuits). ASICs person been astir forever, but Broadcom has go the superior institution launching AI versions of them. Essentially, it partners with a lawsuit to plan an AI spot meant specifically for their workloads. Then, it works with accumulation facilities to manufacture these chips.

At the end, the AI hyperscaler gets a spot specifically for its workload that it didn't person to fig retired however to nutrient (an highly in-depth and nuanced process).

The astir celebrated illustration of 1 of Broadcom's customized AI chips is the Tensor Processing Unit (TPU) from Google. The TPU has been a agleam spot successful Google's interior AI capabilities, arsenic good arsenic successful different clients' systems, due to the fact that it's disposable for rent via Google Cloud.

Broadcom has respective different clients that are presently successful production, with much slated to motorboat aboriginal this year. This volition thrust outsized gross maturation for Broadcom, which is the superior crushed wherefore I'm bullish connected it.

For the first-quarter of its fiscal 2026 (ended successful aboriginal February), Broadcom expects its AI semiconductor gross to treble twelvemonth implicit twelvemonth to $8.2 billion. For reference, the full gross for Broadcom is expected to beryllium $19.1 billion.

However, there's thing important to constituent out. If we subtract retired the AI semiconductor gross from Broadcom's $19.1 cardinal full projection for Q1 FY 2026, we're near with $10.9 cardinal successful non-AI semiconductor revenue. In Q1 FY 2025, Broadcom generated $14.9 cardinal successful revenue, oregon astir $10.8 billion, with nary AI semiconductor revenue. This means that Broadcom's halfway concern isn't increasing astatine all, and the maturation is coming from AI.