1 Reason Broadcom Could Join the $3 Trillion Club Before You Expect

By Manali Pradhan, CFA – Mar 28, 2026 at 9:05AM ESTKey PointsBroadcom’s AI semiconductor revenue surged 106% year over year in the first quarter.It has secured multi-year partnerships with six major customers to co-develop custom AI chips. Even with valuation compression, Broadcom could reach a market cap of close to $3 trillion in two years.Broadcom (AVGO 2.66%) is proving to be one of the biggest beneficiaries of the artificial intelligence (AI) revolution. Yet the scale of its opportunity may still be underappreciated, especially as AI spending is shifting from experimentation to real-time deployments. Image source: Getty Images. The company's revenue was up 29% year over year to $19.3 billion, while GAAP net income soared 34% to around $7.3 billion in its fiscal 2026's first quarter (ended Feb. 1). However, AI semiconductor revenue, which includes sales of custom AI chips and networking components, surged 106% to $8.4 billion. Management now expects AI chip revenue alone to exceed $100 billion in 2027. With such exceptional business momentum, the one reason Broadcom can realistically reach a $3 trillion valuation sooner than expected is its deep and expanding role in AI infrastructure. AI infrastructure dominance Broadcom has entered multi-year partnerships with six strategic customers to co-develop custom AI accelerators (XPUs). These engagements have clear roadmaps, with deployments scaling to gigawatts of compute capacity. Management has already secured supply chains through 2028. Its custom AI chips are increasingly used for both training and inference (real-time deployment) of AI models. AI networking has also emerged as a prominent growth engine. In the first quarter, AI networking revenue was up 60% year over year and accounted for one-third of the company's total AI revenue. Broadcom expects it to account for nearly 40% of its AI revenue in the second quarter. ExpandNASDAQ: AVGOBroadcomToday's Change(-2.66%) $-8.23Current Price$301.18Key Data PointsMarket Cap$1.4TDay's Range$298.88 - $307.5052wk Range$138.10 - $414.61Volume1.1MAvg Vol26MGross Margin64.96%Dividend Yield0.82% Reaching a $3 trillion market cap Analysts expect Broadcom's revenue to be around $104.7 billion in fiscal 2026 (ending Nov. 2) and $155.6 billion in 2027. Shares currently trade at 22 times sales, which is steep. If the price-to-sales ratio simply reverts to its three-year median of 18.8 by the end of fiscal 2027, the valuation can reach $2.9 trillion. This is very close to $3 trillion, even after assuming compression of the valuation multiple. Hence, considering Broadcom's unusually strong revenue visibility, the stock can realistically reach a valuation close to $3 trillion in the next couple of years.Read NextMar 28, 2026 •By Chris Neiger3 Technology Stocks That Belong in Every Long-Term PortfolioMar 26, 2026 •By Geoffrey SeilerPrediction: 3 Stocks That Will Benefit More From the AI Boom Than Nvidia by 2028Mar 25, 2026 •By James HiresOpenAI Just Became Broadcom's Newest Chip Customer. Here's Why That's a Massive Deal for 2026.Mar 24, 2026 •By Geoffrey SeilerPrediction: The "Million-XPU" Data Center Will Be the Most Important Artificial Intelligence (AI) Trend of 2026. Here's 1 Stock to Own.Mar 24, 2026 •By Justin Pope1 Oversold AI Stock to Buy Before It Rebounds This SpringMar 23, 2026 •By James HiresBroadcom's AI Revenue Just Doubled to $8.4 Billion. Is This the Most Underrated Artificial Intelligence (AI) Stock of 2026?About the AuthorManali Pradhan, CFA, is a contributing Motley Fool stock market analyst covering technology, pharmaceuticals, medical devices, and industrial sectors. Manali brings prior experience as a healthcare analyst and team lead at Market Realist, a data equity analyst at Morgan Stanley, and a data analyst at Deloitte Financial Advisory Services. She holds a bachelor’s degree in computer engineering and a master’s in finance from Mumbai University.TMFManaBStocks MentionedBroadcomNASDAQ: AVGO$301.18(-2.66%)-$8.24*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.