Prediction: This Unstoppable Stock Will Rejoin the $2 Trillion Club by 2027

The U.S. is home to 11 companies worth at least $1 trillion, but only six of them are currently worth $2 trillion or more. Semiconductor giant Broadcom (NASDAQ: AVGO) used to be in that exclusive club, but its stock is currently down 23% from its June peak amid concerns about the sustainability of the global artificial intelligence (AI) infrastructure build-out.

Broadcom supplies data center processing chips and components necessary to run AI training and inference workloads, so its stock price can be highly sensitive to any hint of a slowdown in infrastructure spending. Over the last few months, many large companies have imposed AI usage limits on their employees and pivoted workloads to cheaper models to save money. That doesn't bode well for semiconductor demand .

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However, Broadcom's latest quarterly report suggests it still has plenty of growth in the tank. The company had a market capitalization of $1.77 trillion as of the market close on Tuesday, Sept. 8, and here's why I predict it will rejoin the $2 trillion club before 2027.

Broadcom's data center chips are quickly becoming best-in-class

Nvidia 's graphics processing units ( GPUs ) are the world's best out-of-the-box data center chips for AI workloads. However, AI companies like OpenAI, Anthropic, Alphabet , and Meta Platforms are increasingly opting for specialized solutions to fulfill their specific needs, so Broadcom is helping them design and fabricate custom AI accelerators.

Alphabet has a long-term partnership with Broadcom spanning multiple generations of its custom data center chips, which are called Tensor Processing Units (TPUs). Alphabet monetizes these chips in a few ways. First, it uses them to further improve its Gemini AI models, which generate revenue through platforms like Google Search. Second, it rents TPUs to developers via its Google Cloud platform. And third, it's now selling TPUs directly to customers like Anthropic.

Broadcom recently started shipping Alphabet's new v8i TPU, which it says surpasses Nvidia's latest Vera Rubin GPU systems in terms of performance. Broadcom says each successive generation of Alphabet's TPUs through 2028 and 2029 will experience growing demand, particularly from Anthropic, which is expected to become the chipmaker's largest buyer next year.