Will Broadcom Rejoin The $2 Trillion Club In 2027?
As I write this on Oct. 14, there are 12 publicly traded American companies with market capitalizations of at least $1 trillion, and six of them are worth $2 trillion or more. Broadcom (NASDAQ: AVGO) was recently in that exclusive club, but its stock has fallen by 26% from its June peak as investors worry about the sustainability of the artificial intelligence (AI) infrastructure spending boom.
Over the last few months, AI labs like Anthropic, OpenAI, and xAI floated plans to slow down the pace of AI development to lower the potential risks to humanity. Moreover, many businesses have started prioritizing efficiency when running AI workloads to save money. And last week, one of Australia's largest AI data center start-ups pulled the plug on its initial public offering (IPO) due to a lack of demand from investors.
Broadcom supplies some of the best data center chips and components for developing AI, so its stock is highly sensitive to some of the abovementioned headwinds. However, management is forecasting significant revenue growth over the next couple of years, which could lead to significant returns for investors. The company currently has a market cap of $1.71 trillion, but can it rejoin the $2 trillion club within the next year?
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