Prediction: This Is What a $5,000 Investment in Broadcom Will Be Worth by 2028

Broadcom (NASDAQ: AVGO) has been one of the quieter top-performing investments throughout the AI arms race. If you invested $5,000 at the start of the AI arms race in 2023, that sum is now worth more than $32,000. However, investors must look forward, not backward. Luckily, Broadcom's future is brighter than ever, and I think a $5,000 investment now could lead to a much larger sum later.

While it won't be able to repeat the incredible performance it gave investors over the past three and a half years, I think it's still worth buying now.

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Broadcom's custom AI units are becoming popular

Broadcom does a lot of different things as a company, ranging from software to virtual desktops to networking hardware. However, the most exciting product development over the past few years has been its custom AI chips. Instead of going head-to-head with companies in the GPU space , which excel at all types of workloads, Broadcom is partnering directly with AI hyperscalers to develop chips purpose-built for their workloads. These units can provide better performance at a lower price tag than their GPU counterparts, but only when the workloads are properly configured.

Broadcom has several big-name clients, including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), OpenAI, and Anthropic, to name a few. These companies have all chosen to partner with Broadcom over some other competitors in this space, and the results have been simply incredible.

Broadcom's AI semiconductor revenue is exploding, rising 221% year over year to $16.7 billion. Next quarter, they project $21.7 billion, up 236% year over year. But that's just the start.

In fiscal year 2027, Broadcom expects $115 billion in AI semiconductor revenue. In 2028, that figure is expected to rise to $230 billion. AI hyperscalers are starting to use more and more specialized computing units, and Broadcom is the primary company that's supplying them. What's even more impressive is that Broadcom has secured the supply chain necessary to build these computing units, which makes this position even more concrete.

This projection also makes a lot of sense logically, as the AI hyperscalers are looking to maximize computing output for the money spent, and utilizing a specialty device makes the most sense. While there will always be a need for GPUs, Broadcom's custom AI chips will start to take substantial market share over the next few years.