Broadcom's 2028 Projection Makes the Stock a Screaming Buy

Even though there's still a quarter left in 2026, some firms are already discussing 2028 demand. Broadcom (NASDAQ: AVGO) is one of those, and investors need to pay attention to what it says. These long-term projections can give individual investors an edge over some funds, because the funds are required to deliver strong quarterly returns to their clients. Short-term investors can take a long-term approach, and with Broadcom expected to deliver huge growth over the next few years, it looks like a strong buying opportunity.

I think it's a screaming buy right now, given the guidance its CEO, Hock Tan, issued. If it can deliver, Broadcom's stock is slated for monster upside.

Image source: The Motley Fool.

Broadcom's AI revenue is going to skyrocket

Broadcom's biggest exposure to AI is through its custom AI chips. While the GPU is still the industry standard for AI computing units, it isn't optimized for any one workload. Broadcom is partnering directly with AI hyperscalers to develop custom AI chips that are optimized for their workloads. These devices are becoming popular, and several AI firms, including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), OpenAI, and Anthropic, are working with Broadcom to develop custom AI chips.

This is going to lead to huge growth for Broadcom, and Tan discussed its trajectory during its most recent earnings call:

In 2027, we have secured the supply to again double AI revenue to approximately $115 billion. Our demand actually exceeds this outlook, and we will work to improve supply. In 2028, we expect the trajectory of growth to continue. We have line of sight for fiscal 2028 AI semiconductor revenue growth to again double to $230 billion. Here again, we have secured the supply to meet this outlook.

For reference, its AI semiconductor revenue was about $16.7 billion during its most recent quarter. That's huge growth coming down the pipeline, but the market hasn't priced in any of that.

Broadcom's stock trades for less than 18 times next year's earnings. That already means it could have a great year if the stock rises to something like 30 times trailing earnings.

AVGO PE Ratio (Forward 1y) data by YCharts

However, that projection doesn't include Broadcom's AI semiconductor revenue doubling again in 2028. None of that is priced in, and it could lead to the stock doubling in 2028, driven by soaring revenue and profits.

With many AI hyperscalers placing orders for their computing units years in advance, it gives Broadcom strong visibility into what's ahead. The market is asleep at the wheel with Broadcom's stock, and now is the perfect opportunity to buy more.

Keithen Drury has positions in Alphabet, Broadcom, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Broadcom, and Meta Platforms. The Motley Fool has a disclosure policy.