Reaching a $1 trillion valuation isn’t as exclusive as it once was, but companies with a market cap of $3 trillion aren’t such a large group. There are only four members at the moment: Nvidia, Alphabet, Appleand Microsoft. They’re a who’s who of big tech, and there’s a reason they’re so highly regarded.
However, I think there could be another member of the $3 trillion club by the end of the year: Broadcom (NASDAQ: AVGO)which currently has a market capitalization of $1.7 trillion. So in order for it to join Nvidia and the other three, its stock needs to rise about 77% in 2026. That would be an incredible feat and would make it a must-buy if it pulls it off. But is it realistic?
Broadcom does a lot of different things. Its products include mainframe software, wireless and wired connectivity, data storage and virtual desktop software through its acquisition of VMware. This has allowed it to grow into a powerful conglomerate, but all this could be replaced by its new business: custom AI accelerator chips.
Instead of offering a multi-purpose chip like a graphics processing unit (GPU), Broadcom works directly with some of the leaders in artificial intelligence (AI) to design chips that fit their needs. These are known as ASICs (for application specific integrated circuits).
ASICs are nothing new. They have been around for a long time and power many specific workloads. However, Broadcom is really the only one doing it for AI-focused hardware.
When a semiconductor is designed for a specific workload, it can unlock speed and efficiency not available from a general-purpose chip. One of Broadcom’s most successful custom AI chips is Google’s Tensor Processing Unit (TPU), which won’t completely replace GPUs, but can bolster the overall computing strategy of an AI hyperscaler.
Several AI companies besides Alphabet currently use a chip designed by Broadcom or have one in its development stages, including OpenAI, the creators of ChatGPT. So the ASIC business is booming, and instead of being something that Broadcom does on the side, it’s becoming its core business.
In the fourth quarter of fiscal 2025 (ended Nov. 2), Broadcom’s total revenue was $18 billion. The main bright spot in that quarter was the AI semiconductor business, which grew 74% year-over-year to $6.5 billion, which accounted for about a third of Broadcom’s total revenue.
And management sees its AI semiconductor business growing to $8.2 billion of its estimated total of $19.1 billion in the first quarter of 2026. That growth is expected to continue throughout the year and become the company’s largest business segment.
For fiscal 2026, Wall Street analysts expect it to grow revenue by 51% and grow earnings per share (EPS) to $10.14, up from $6.82 in fiscal 2025. That will be considered a successful year, but will it be enough to reach a $3 trillion market cap?
If Broadcom shares rise 77% from the current price of $352, that would be $623 per share. If it generates $10.14 in EPS, as expected, it would trade at 61 times trailing earnings.
It’s not cheap, but its shares are already trading at 74 times trailing earnings. So if the company hits analysts’ earnings estimates and its valuation drops just a bit, Broadcom could be a $3 trillion company by the end of 2026. It won’t be easy, but I think it’s entirely doable. And even if they miss that point, the upside is there for this to be a successful investment.
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Keithen Drury has positions in Alphabet, Broadcom and Nvidia. The Motley Fool has positions and recommends Alphabet, Apple, Microsoft and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long $395 January 2026 Microsoft calls and short $405 January 2026 Microsoft calls. The Motley Fool has a disclosure policy.
Prediction: This stock will join the $3 trillion club by the end of 2026. You’ll want to buy it now. was originally published by The Motley Fool
