Regardless of the recent stock market volatility, the explosive demand for semiconductors and microchips that has grabbed news headlines and led the market higher over the past few years remains. As the drive toward integrating artificial intelligence (AI) into our everyday lives progresses, a handful of mega-cap companies are capable of meeting that demand. While Nvidia Corp. ( NASDAQ: NVDA ) may get the lion's share of attention, companies like Broadcom Inc. ( NASDAQ: AVGO ) will also be playing a central role in supply. 24/7 Wall St. Key Points: Broadcom's history of stellar earnings and strong revenue generation suggests the ability of the company to remain one of the most appealing semiconductor and software stocks. With the burgeoning AI trend and a recent stock split, Broadcom is increasingly appealing and more accessible to investors. 24/7 Wall St. sees plenty of room for shares to run through the end of the decade. If you're looking for a megatrend with massive potential, make sure to grab a complimentary copy of our "The Next NVIDIA" report . It breaks down AI stocks with 10x potential and will provide a huge leg up on profiting from this massive sea change. Broadcom's history of stellar earnings and strong revenue generation suggests the ability of the company to remain one of the most appealing semiconductor and software stocks. With the burgeoning AI trend and a recent stock split, Broadcom is increasingly appealing and more accessible to investors. 24/7 Wall St. sees plenty of room for shares to run through the end of the decade. If you're looking for a megatrend with massive potential, make sure to grab a complimentary copy of our "The Next NVIDIA" report . It breaks down AI stocks with 10x potential and will provide a huge leg up on profiting from this massive sea change. The San Jose-based company, which was founded in 1961, has been a major player in the tech space for decades. But its business sectors focusing on semiconductors and infrastructure software products have been major catalysts in its market cap pushing toward $1 trillion market capitalization - good for a top 10 among all publicly traded companies. Lately, Broadcom has been heavily emphasizing its advancements in optical connectivity solutions designed to support the growing demands of AI infrastructure. This includes developments in co-packaged optics (CPO), high-speed DSP and SerDes, and PCIe Gen6 over optics. First-quarter financial results showed strong revenue and earnings growth, driven by both AI semiconductor solutions and infrastructure software. The company's announcement of a new $10 billion share repurchase program demonstrates confidence in its strong cash flow. Despite shares of Broadcom gaining over 580% in the past five years and about 34% in the past year, 24/7 Wall St. has performed an analysis that suggests there is still a big-time upside for Broadcom before the end of the decade. Here is where prospective investors and current shareholders might expect the stock to head over the next five years. Broadcom's Recent Success Broadcom's incredible growth has been reflected in the price of its shares, which have surged since 2014 to the tune of a 2,825% gain. This culminated on July 15, 2024, when the company announced a 10-for-1 stock split that made its shares more accessible to all investors by driving the stock's price down to $167 at the time. Beyond its role in AI and semiconductors, Broadcom is also a major supplier for Apple Inc. ( NASDAQ: AAPL ), providing the Magnificent 7 mainstay with critical wireless connectivity components and other hardware. Between its semiconductor, software and smartphone business segments, the stock has experienced sizable growth in the recent past: *Post-split adjusted basis , **Revenue and net income in $billions Over the past decade, Broadcom's revenue grew by more than 647% while its net income increased by over 808%. Despite a slight contraction in share price in 2022 during an extended bull market that had an outsized impact on the tech sector, on a post-split adjusted basis, shares of Broadcom climbed 1,009.64% from 2014 through 2023. Key Drivers of Broadcom's Stock Performance As the Silicon Valley mainstay looks toward the second half of the decade, 24/7 Wall St. has identified three key drivers that are likely to positively impact Broadcom's growth metrics and stock performance through 2030. 1. Exceptional Track Record of Earnings and Revenue Beats: Going back to the first quarter of 2015, Broadcom has beaten earnings in every single quarter except one. That is one earnings miss over the course of 39 quarters. Expectations are that the company will continue to beat on earnings and revenue, with a forecast earnings per share (EPS) of $1.39 for the last quarter of 2024. In the third quarter of 2024, the company posted an impressive 17.65% year-over-year EPS gain, which year-over-year total revenue grew from $8.88 billion in July 2023 to $13.07 billion in July 2024 - an increase of 47.18%. 2. Filling the Gap Nvidia Cannot Satisfy: For investors concerned about Nvidia's possible overvaluation or the company's inability to single-handedly satisfy the explosive AI-driven semiconductor demand, Broadcom is an alternative that at current prices could be considered a bargain. In September, Barchart.com reported that the "stock looks deeply undervalued ... based on its strong revenue, free cash flow, FCF margin, management guidance and analysts' price targets." Specifically, that free cash flow has grown markedly between FY 2019 to FY 2023, from $9.27 billion to $17.63 billion good for an increase of over 90%. As demand for semiconductors and microchips continues to grow, Broadcom has an abundance of cash ready to deploy in order to match that growth. 3. Institutional Ownership: Broadcom is beloved by institutional investors, of which there are 3,382. Of the company's 4.671 billion shares outstanding, a staggering 3.537 billion of them are held by institutional investors, according to Nasdaq.com. That accounts for 75.74% of the company's entire stock. The top three largest holders are Vanguard Group with 448 million shares followed by BlackRock at 342 million and Capital World Investors with 224 million shares. Together, those three positions account for $175.432 million in share value. And in the past year, 1,760 institutional investors increased their positions. Broadcom Stock Price Prediction in 2025 By the end of 2025, 24/7 Wall St.'s forecast for the shares is $20.27, representing a 10.90% potential downside, based on an EPS of $6.19 and a PE ratio of 33. How Broadcom's Next Five Years Could Play Out At the end of 2025, we forecast Broadcom's stock to be trading for $204.27 based on revenue of $60.492 billion, a net income of $34.224 billion, and an EPS of $6.19. The following year, we estimate earnings per share of $7.29 on over $67 billion in revenue. *Revenue and net income in $billions Starting in 2027 through 2029, we expect a 13% growth in revenue and a 40% jump in earnings per share, bringing Broadcom's price target from $238.14 in 2027 to $373.13 in 2029. By the conclusion of 2030, 24/7 Wall St. estimates Broadcom's stock will trade at $429.09, representing a 91.40% increase from its current price, based on revenue of $86.618 billion and an EPS of $18.66. While Sellers Are Panicking, Wall Street Experts See Up to 79% Gains This Year for AMD, Broadcom, and CrowdStrike It's Your Money, Your Future-Own It (sponsor) Are you ahead, or behind on retirement? For families with more than $500,000 saved for retirement, finding a financial advisor who puts your interest first can be the difference, and today it's easier than ever. SmartAsset's free tool matches you with up to three fiduciary financial advisors who serve your area in minutes. Each advisor has been carefully vetted and must act in your best interests. Start your search now. If you've saved and built a substantial nest egg for you and your family, don't delay; get started right here and help your retirement dreams become a retirement reality. Thank you for reading! Have some feedback for us? Contact the 24/7 Wall St. editorial team .
Broadcom is a California-based technology company that designs, develops and supplies semiconductor equipment, software products and security solutions for various industries.