Key Points

Broadcom's specialized circuits are seeing huge demand.
The chipmaker should see significant growth in 2027.
The recent sell-off offers an opportunity to investors.

When investors consider artificial intelligence chips, attention usually goes straight to Nvidia or Advanced Micro Devices. Both remain strong choices, yet another contender merits serious focus: Broadcom, a significant force in AI semiconductors that often flies under the radar. Its shares have pulled back lately, creating what appears to be an attractive entry point for long-term holders.

Broadcom trades roughly 20 percent below its record peak. With robust chip demand expected over the coming years, the stock appears poised to reclaim and surpass prior highs.

Image source: Getty Images.

Broadcom follows a distinct path in AI chip design

Nvidia and AMD promote GPUs as versatile solutions for AI workloads. These chips manage diverse tasks effectively. Many AI firms, however, operate with highly optimized training and inference processes that do not require such broad flexibility. In these cases, excess GPU features go unused. As a result, organizations increasingly seek Broadcom for application-specific integrated circuits, or ASICs, which deliver tailored performance for AI tasks.

Broadcom collaborates with clients on the design and production of these custom chips, yielding strong results. Alphabet's Tensor Processing Unit stands as a prime example; the company has begun offering the chip externally. Additional key customers include OpenAI and Anthropic, with their custom chip volumes expected to accelerate sharply in 2027.

This momentum supports substantial expansion. Broadcom projects AI semiconductor revenue exceeding $100 billion in fiscal 2027. Including its broader operations, analysts forecast total revenue near $172 billion by the close of that year. The firm generated $75 billion over the past twelve months, implying revenue could more than double within the next two years.

AVGO Revenue (TTM) data by YCharts; TTM equals trailing twelve months.

Given the recent price decline and Broadcom's solid position in AI, the shares look like a sensible purchase following the drop. Such pullbacks remain infrequent, so investors may wish to act on the current weakness.

Should you buy stock in Broadcom right now?

Before purchasing Broadcom shares, note the following:

Independent research has highlighted ten standout stocks for current consideration, and Broadcom did not appear on that list. Those selected names could deliver substantial gains ahead.

Historical examples show how early picks in companies such as Netflix and Nvidia produced exceptional returns for followers of the recommendations. Overall, the service's average performance has significantly outpaced the broader market.

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*Past performance figures referenced as of mid-June 2026.

Author holds positions in Alphabet, Broadcom, and Nvidia. Disclosures indicate positions and recommendations in Advanced Micro Devices, Alphabet, Broadcom, and Nvidia.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.