Is Broadcom 1 of the Best AI Stocks for 2026?

Few companies had as successful a 2025 as Broadcom (NASDAQ: AVGO). The stock rose an impressive 50%, but there could be plenty of room to run with the industry that it's in.

While Broadcom has a wide product lineup, investors are most excited about one thing: custom artificial intelligence (AI) accelerator chips. In the right application, these can outperform the best products from Nvidia at a lower price point.

That's an extremely attractive proposition, and is one that more companies are starting to explore. But does that make Broadcom one of the best AI stocks for 2026?

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Broadcom's growth could be impressive in 2026

Looking at Broadcom's company-wide performance doesn't yield such impressive results. In its fiscal 2025's fourth quarter (ended Nov. 2), revenue rose 28% year over year, and diluted earnings per share (EPS) increased by 37%. Those are solid results, but other companies in the big tech realm are putting up as good or better numbers.

However, Broadcom's custom AI chips are buried underneath these results and are expected to deliver outsized returns in 2026 and beyond. Of the $18 billion that Broadcom generated in the quarter , AI semiconductor revenue made up $6.5 billion of it. This division grew at a blistering-fast pace of 74% year over year. For comparison, Nvidia's latest quarter (ended Oct. 26) saw data center growth of 66% year over year. This means that Broadcom's AI-focused division is growing faster than Nvidia's, showcasing the huge demand for its services.

But that growth isn't over. For Q1, they expect AI semiconductor revenue of $8.2 billion -- more than double what it generated last year. The fact that Broadcom's AI semiconductor revenue is ramping up so quickly showcases the huge demand for its products. But why are they so popular?

ASIC chips will continue to grow in popularity

Most companies don't have the expertise needed to design their own chip. While they may be able to outline how they want the chip to operate, designing a chip for production is a whole different skill set. That's where Broadcom comes in.

Broadcom's expertise, combined with its clients' design, yields a potent combination that can produce a chip that outperforms broader-use chips like graphics processing units (GPUs) from Nvidia. These chips are known as ASICs, application-specific integrated circuits. ASICs can't handle a wide variety of workloads like GPUs can, but when a workload is configured properly, an ASIC can deliver better performance at a lower price point.

The most prominent example of an ASIC success is Alphabet's Tensor Processing Unit (TPU). The TPU has been Alphabet's secret weapon to catch up in the generative AI realm, and there is even the possibility that Alphabet will begin selling these to other companies. However, the success of the TPU has also driven many companies to Broadcom, and many AI businesses, like OpenAI, are planning on launching their own chip in the near future.

That's why Broadcom is expected to grow so much in the next few years. In its fiscal 2025, Broadcom's revenue totaled $63.9 billion, up 24% year over year. For fiscal 2026, the average estimate of 42 Wall Street analysts indicates 50% revenue growth to $96 billion. In fiscal 2027, its revenue growth is projected to be 36%, with $130 billion in revenue.

That's a huge growth explosion, and it can all be traced back to ASICs becoming a huge part of many companies' artificial intelligence strategies. As a result, I think Broadcom is an excellent stock to buy now and hold throughout 2026 and beyond. Broadcom has a ton of momentum in its business, and the only thing that will stop it is if AI hyperscalers decide to quit spending money on data centers, which I don't see happening anytime soon.

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