Is Broadcom a Buy?

By Chris Neiger – Mar 22, 2026 at 9:45AM ESTKey PointsBroadcom's management says artificial intelligence (AI) sales will double in 2027.The company will have an estimated 60% of the application-specific integrated circuits market next year and is benefiting from surging AI spending.It's getting difficult to sort through all of the artificial intelligence (AI) noise out there. Some people are warning of a looming AI bubble popping, while others are sounding the alarm about software companies being disrupted. And some are still saying AI's long-term impact is overstated. As with many things in life, there may be a shred of truth to all of them. The AI market is still taking shape, making it difficult to predict where it's headed. But that doesn't mean there aren't some clear winners. Here's why semiconductor company Broadcom (AVGO 2.99%) is in a unique position to benefit and why buying some of its shares could be a smart move. Image source: Getty Images. Booming AI infrastructure spending is accelerating Broadcom's business Broadcom designs application-specific integrated circuits (ASICs) used extensively in artificial intelligence data centers, and the surge in spending on AI compute power has accelerated Broadcom's sales and earnings. The company's AI revenue more than doubled in the first quarter (which ended Feb. 1) to $8.4 billion, and Broadcom's non-GAAP (generally accepted accounting principles) earnings per share jumped 28% to $2.05. Management believes AI revenue will continue to grow, reaching an estimated $10.7 billion in the second quarter and at least $100 billion in chip revenue in 2027. And research from Morningstar says Broadcom's estimate of AI sales doubling in 2027 could be "conservative." Broadcom is in a unique position to continue benefiting from the AI boom because the company holds a dominant position in AI ASIC processors, with a growing market share expected to reach 60% by next year, according to CounterPoint Research. That lead will help Broadcom capture much of the AI spending surge that's currently underway. Meta Platforms, Microsoft, Amazon, and Alphabet have all announced capital expenditures, mostly for AI, that collectively amount to $650 billion in spending this year. As these companies battle it out for AI dominance, Broadcom can sell them all processors and just sit back and benefit no matter who comes out ahead. ExpandNASDAQ: AVGOBroadcomToday's Change(-2.99%) $-9.57Current Price$310.27Key Data PointsMarket Cap$1.5TDay's Range$309.93 - $321.5052wk Range$138.10 - $414.61Volume1MAvg Vol26MGross Margin64.96%Dividend Yield0.78% Broadcom is a buy, but just keep an eye on this Given Broadcom's current growth, estimates for more AI sales in 2027, and the company's market share, there are plenty of good reasons to own Broadcom right now. If there's one word of caution, it's that at some point, all of the AI spending will slow down. Bears think this is just around the corner, but until it becomes clear that tech companies are pulling back on their data center investments, it's probably best not to be sitting around waiting for the sky to fall. Instead, buying some Broadcom shares and holding for the long term looks like a good idea right now. Just keep a close eye on any shift in AI spending, whenever it comes.Read NextMar 22, 2026 •By Geoffrey SeilerThe Best Stocks to Invest $1,000 in After Last Week's Market VolatilityMar 21, 2026 •By Geoffrey SeilerBetter Semiconductor Stock: Broadcom vs. Marvell TechnologyMar 20, 2026 •By Daniel SparksASML vs. Broadcom: Which AI Stock Is a Better Buy?Mar 20, 2026 •By Harsh ChauhanPrediction: Broadcom Stock Will Trade at This Price in 2030Mar 20, 2026 •By Geoffrey SeilerArista Networks vs. Broadcom: Which AI Infrastructure Stock Is the Better Buy for 2026?Mar 20, 2026 •By James BrumleyMy Top 3 Megacap Stocks to Buy After Microsoft's Latest PullbackAbout the AuthorChris Neiger has been a contributing Motley Fool technology and automotive analyst since 2012.

Before The Motley Fool, Chris was an automotive journalist for the BBC. He holds a master’s degree in journalism from Regent University and a bachelor’s degree from the University of Delaware.TMFNewsieStocks MentionedBroadcomNASDAQ: AVGO$310.27(-2.99%)-$9.57*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.