Broadcom Stock’s Path To 2x Growth

Broadcom’s stock (NASDAQ: AVGO) is on the rise, supported by strong quarterly results and a new custom AI-chip customer win. Adding to the upbeat outlook, the company expects revenue growth to accelerate next year. It’s no surprise, then, that the stock has more than doubled over the past twelve months.

But what could power another 100% climb to levels above $600 from here? We’ll examine the pivotal drivers that could lift the stock to new highs in the analysis below. That said, if you want upside with less volatility than holding a single name, consider the High Quality Portfolio. It has handily outpaced its blended benchmark—a mix of the S&P 500, Russell, and S&P MidCap indexes—delivering returns of over 91% since inception. Separately, see important current market context – S&P 500 Index To Crash 8%?

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Key Drivers That Could Propel Broadcom’s Future Growth:

Expanding Hyperscaler Customer Base for AI Chips

Broadcom’s momentum is rooted in its custom AI-chip partnerships with leading hyperscalers, including Google (for its TPU) and Meta. In a notable update on September 4, 2025, the company said it secured a fourth major, unnamed customer for its custom AI accelerators (XPUs), a deal reportedly valued at $10 billion. This broadens revenue sources and reinforces Broadcom’s role as a core supplier for large-scale AI infrastructure.

Dominance in the Shift to AI Inference

While the early AI surge centered on training, the market is now tilting toward inference—an area where Broadcom holds a strategic edge. As AI applications scale, demand for high-performance, power-efficient inference silicon and networking is soaring. Broadcom’s depth in specialized networking and processing is vital for these workloads, positioning it to capture a substantial share of this market.

Technological Leadership in Networking and Silicon

Broadcom sustains its lead through rapid product innovation. It is shipping Tomahawk 6 and Tomahawk Ultra networking chips that materially outperform prior generations and are essential for building massive AI clusters. In addition, leadership in co-packaged silicon photonics enables the faster, more efficient data movement required by advanced AI. Notably, Tomahawk Ultra can link up to 1,024 accelerators within a single rack—well above NVIDIA’s NVLink Switch, which supports up to 72 GPUs.

Successful VMware Integration and Software Growth

Beyond hardware, the VMware acquisition has turned Broadcom into a major infrastructure-software player. The company is migrating VMware customers to subscriptions and streamlining the portfolio. This shift is lifting recurring revenue and is expected to generate sizable, durable cash flows, materially enhancing overall margins. For context, VMware—part of Broadcom’s infrastructure software segment—grew revenue 43% y-o-y to $6.8 billion in Q3 fiscal 2025 (fiscal year ending in October).

The Path to a 2x Stock Price

For Broadcom’s stock to double, it needs a powerful mix of robust earnings growth and a sustained premium valuation. The path rests on two pillars:

1. Revenue Growth Translating to Exponential Earnings

The growth base is a strong top-line outlook. We project Broadcom’s revenue could rise from roughly $60 billion in the last twelve months to more than $105 billion by 2028, driven chiefly by AI and VMware.

Crucially, Broadcom’s exceptional profitability amplifies that growth. With adjusted net income margins around 50%, revenue gains have an outsized impact on the bottom line. For example, if revenue increases by 75% over the next few years, adjusted earnings per share (EPS) could nearly double from about $6.29 now to $12 in 2028.

2. Sustaining a Premium Valuation Multiple

Earnings expansion alone isn’t sufficient—the stock also needs to hold its premium valuation multiple. Broadcom has traded at over 50 times trailing adjusted earnings for several reasons:

• High Switching Costs: Deep, multi-year customer commitments add revenue visibility and pricing power.
• Elite Financials: The business runs with best-in-class profitability and cash-flow margins.
• Market Leadership: It dominates high-growth areas such as AI networking and custom silicon.

If investors continue to assign a multiple near 50x, an EPS of $12 implies a stock price around $600. The multiple could also expand if Broadcom sustains AI revenue growth above 40%, gains additional market share, and lands more large-scale customers.

Key Risks to Consider

Despite the strong outlook, several factors could weigh on Broadcom’s performance and valuation.

Customer Concentration and AI Spending

A significant portion of Broadcom’s AI revenue comes from a small set of hyperscalers. Although profitable, this concentration is a risk: a spending change or strategic pivot by even one major customer could disproportionately affect results. Any slowdown in the rapid build-out of AI infrastructure would also challenge Broadcom’s main growth engine.

Competitive Pressure and Margin Erosion

AI chips and networking are fiercely competitive. Broadcom faces pressure from incumbents such as Marvell and NVIDIA, and from the possibility that hyperscalers increase in-house silicon. Such competition could compress the high margins that underpin Broadcom’s premium valuation.

Macroeconomic and Market Sensitivity

Broadcom’s stock has historically shown higher volatility than the S&P 500 during broad market drawdowns, with steeper declines in both the COVID-19 correction and the 2022 inflation shock. This signals elevated sensitivity to macro uncertainty, and a future slowdown or market disruption could trigger a sharp pullback.

The Verdict

Over the next few years, Broadcom’s stock could climb to over $600. The route to a 2x return is straightforward: deliver the projected revenue and earnings growth while convincing the market its premium multiple is durable.

Investors should also weigh the risks. The stock has seen drawdowns of up to 50% in the past, and similar volatility is possible. Even so, for those with a three-year-plus horizon, Broadcom offers a compelling shot at doubling from current levels.

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