"Broadcom ( NASDAQ:AVGO) isn't a member of the Magnificent Seven, but it's now tussling with those same companies for the largest market cap. The AI chipmaker surpassed Tesla ( NASDAQ:TSLA) to become the 7th largest publicly traded corporation, and it's poised to move further up in the rankings. Meta Platforms ( NASDAQ:META) is an easy candidate since Broadcom briefly had a higher market cap than Facebook's parent company this year."
"Broadcom is a key player in artificial intelligence and works with big tech companies. AI has been the hottest industry due to its wide-ranging possibilities. AI models like ChatGPT demonstrated how quickly AI products and services can gain momentum and translate into tangible businesses. That's a key distinction from the Dotcom boom, where companies just had to put ".com" after their names to enjoy stock rallies."
"AI has become a key part of Broadcom's 700% rally over the past five years, and it's still growing at a fast rate. Broadcom grew its AI segment by 74% year-over-year in Q4 FY25, and CEO Hock Tan told investors that AI revenue will more than double year-over-year in Q1 FY26. Total revenue grew by 28% year-over-year in the quarter, and Broadcom expects to mirror that growth rate in Q1 FY26."
Broadcom has climbed into the top market-cap tier, overtaking major companies and targeting further advances versus Meta and Amazon. AI demand has driven a 700% rally over five years, with the AI segment up 74% year-over-year in Q4 FY25 and management anticipating AI revenue to more than double in Q1 FY26. Total revenue rose 28% year-over-year, net income nearly doubled, and net profit margins approach 50%. Broadcom raised its dividend 10% and has increased payouts for 15 consecutive years. Custom AI chips are gaining share as cost-efficient, task-specialized alternatives to GPUs.
Read at 24/7 Wall St.
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