I Predicted That Broadcom Would Continue to Soar in the Second Half of 2025. Here’s Why the “Ten Titans” Growth Stock Has Room to Run in 2026.
Broadcom remains one of the best artificial intelligence (AI) stocks for long-term investors to buy now.
After a red-hot first half of 2025, I predicted that Broadcom (AVGO +0.17%) would continue to run higher in the second half of last year due to its leading position in global connectivity and artificial intelligence (AI). Sure enough, Broadcom soared 25.6% in the second half of 2025 and finished the year up 75.5% — outperforming all the “Magnificent Seven” stocks.
Broadcom has compounded in value by so much in recent years that it justified expanding the Magnificent Seven to a group that I coined in August of last year — the “Ten Titans,” made up of:
- Nvidia (NVDA 0.72%)
- Alphabet
- Apple
- Microsoft
- Amazon
- Broadcom
- Meta Platforms
- Tesla
- Oracle
- Netflix
The Ten Titans are so massive that they make up a combined 38.1% of the S&P 500. Despite Broadcom’s rapid run-up, the stock has pulled back in recent months and is down 22.5% from its 52-week high, at the time of this writing. Here’s why the sell-off is an incredible buying opportunity for growth stock investors.
Image source: Getty Images.
Why Broadcom has been selling off
Even after factoring in its recent sell-off, Broadcom is up a mind-numbing 447% over the last three years. When an established, industry-leading company has a massive gain in a relatively short period of time, it’s usually because it caught the market off guard. And in Broadcom’s case, Wall Street underestimated the growth rate of its AI business because it viewed Broadcom as a legacy networking, enterprise software, and broadband/wireless company.
To be fair, most of Broadcom’s non-AI business is doing just OK, with non-AI semiconductor revenue in its latest quarter up just 2% year over year. But Broadcom’s AI growth is impossible to ignore. The company has carved out a highly valuable niche in the AI value chain by designing custom XPU chips, paired with networking devices such as the latest Tomahawk 6 switches and Jericho4 routers.
Broadcom’s solution can be more cost-efficient than general-purpose graphics processing units (GPUs) for certain AI functions, which is why its partnership with Alphabet on its custom Tensor Processing Unit has been getting a lot of attention. And Broadcom’s integrated system makes a lot of sense, given bottlenecks facing AI data centers — namely, memory, load balancing, and congestion, which causes latency.
Memory chip advancements haven’t kept pace with GPUs, which is why AI data centers are demanding high-bandwidth memory — driving stocks like Micron Technology to soar. It’s like having a sports car engine on low fuel: The power doesn’t matter if there’s limited gas. Broadcom’s solution doesn’t solve the memory bottleneck, but it does address network issues to boost bandwidth.
Broadcom has been selling off lately because its earnings growth is heavily dependent on AI spending by major hyperscalers and because Nvidia has made strides in reducing GPU operating costs through a vertically integrated rack-scale hardware and software system. Nvidia’s Vera Rubin architecture consists of a GPU plus five other chips, which Nvidia claims will massively reduce costs and accelerate workflows — directly challenging Broadcom’s foothold in data center networking.
Today’s Change
(0.17%) $0.57
Current Price
$331.30
Key Data Points
Market Cap
$1.6T
Day’s Range
$328.33 – $338.20
52wk Range
$138.10 – $414.61
Volume
28M
Avg Vol
30M
Gross Margin
64.71%
Dividend Yield
0.73%
Broadcom checks all the boxes for a top growth stock to buy now
The hyperscaler spending cycle and competition are factors worth monitoring. But the pie is big enough for Broadcom, Nvidia, and other companies to grow as AI infrastructure expands. Given supply chain bottlenecks, hyperscalers don’t want to be dependent on a single supplier or solution. And the flurry of orders that Broadcom and Nvidia received in recent quarters shows that both companies are winning business.
That said, investors should continue listening closely to management commentary on Broadcom’s earnings calls to see if it can continue winning business to build custom chips for major customers, and if these solutions lead to measurable cost savings in mega-scale data centers.
In the meantime, Broadcom’s 31.1 forward price-to-earnings ratio is an incredibly reasonable valuation for such a high-growth company, especially given Broadcom isn’t betting the farm on AI and has several other levers it can pull to grow over the long term.
Daniel Foelber has positions in Nvidia and Oracle and has the following options: short March 2026 $240 calls on Oracle. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Micron Technology, Microsoft, Netflix, Nvidia, Oracle, and Tesla. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
