Own Broadcom by Sept. 21 to Qualify for Its Sept. 30 Dividend. Here's How Many Shares You'd Need for $5,000 in Yearly Dividends.

Broadcom (NASDAQ: AVGO) has emerged as one of the most well-rounded artificial intelligence (AI) stocks on the market.

The company has a booming custom-chip and AI-networking business. It makes application-specific integrated circuits (ASICs) for hyperscalers like Alphabet, which achieve cost and efficiency advantages as scale. But Broadcom also has massive infrastructure, software, and general-purpose semiconductor solutions segments that are independent of AI -- giving the company multiple levers to pull to unlock earnings growth.

Broadcom also features a growing dividend, with the next payment of $0.65 per share payable on Sept. 30 to shareholders on record as of Sept. 21.

Here's how many shares of Broadcom you'd need to generate $5,000 in yearly dividends and why Broadcom is one of the best dividend growth stocks to buy now.

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Consistent dividend raises reward long-term investors

At $2.60 per share per year, you'd need 1,923 Broadcom shares -- worth a staggering $652,416 at the time of this writing -- to generate $5,000 in yearly dividends. That's because Broadcom only yields 0.8% -- which isn't even close to high-yield territory. But dividend growth stocks like Broadcom can turn into high-yield stocks for long-term investors.

In December 2025, Broadcom raised its dividend for the 15th consecutive year. Over the last decade, Broadcom's quarterly dividend has grown from a split-adjusted $0.051 per share to $0.65 -- a 29% compound annual growth rate (CAGR) over that period. Even over the last five years, Broadcom's dividend has nearly doubled, growing at a 12.5% CAGR.

If Broadcom continues growing its dividend at a 12.5% CAGR, it will double in just under six years, triple in just over nine years, and quadruple in just under 12 years. In this example, investors who buy the stock at its current 0.8% yield would have a yield on cost of 3.2% in just under 12 years -- effectively turning their initial Broadcom investment into a high-yield vehicle.

Broadcom can afford a far larger dividend payout

While there's no guarantee Broadcom will continue to raise its dividend rapidly, its fundamentals suggest it definitely has the capacity and runway to do so. Unlike hyperscalers like Alphabet that have turned free cash flow (FCF) negative as they invest in AI, Broadcom spends very little on capital expenditures (capex).

In its latest quarter -- Q3 fiscal 2026 -- Broadcom raked in record revenue, operating profit, and FCF of $13.7 billion. It spent just $0.5 billion on capex. And for the first three quarters of fiscal 2026, Broadcom generated $31.94 billion in FCF, compared to $9.28 billion in dividend payments. This means that if it wanted to, it could pay a substantially larger dividend.

However, Broadcom also spent $8.45 billion on stock buybacks in the first three quarters of fiscal 2026 and $10.53 billion on debt repayments. So, investors can expect the company to continue deploying a balanced capital return program between dividends and buybacks while maintaining a rock-solid balance sheet.

A shifting customer base

Broadcom is an especially good buy for investors who believe its custom AI chips and networking solutions will continue to take market share in data centers. On its Q3 fiscal 2026 earnings call, Broadcom guided for $115 billion in fiscal 2027 AI revenue and $230 billion in fiscal 2028 AI revenue as orders pour in for its XPU custom AI accelerators. Just six months ago, Broadcom was guiding for $100 billion in 2027 AI revenue, driven by 10 gigawatts (GW) of compute demand.

However, these orders are heavily dependent on sustained capex spending by six key customers -- four of which are Alphabet, Meta Platforms, OpenAI, and Anthropic. Broadcom's rapid development of a custom XPU for OpenAI, called Jalapeno, could reach 5 GW in deployment by 2028, making OpenAI Broadcom's second-largest AI customer. Alphabet is currently first, but Anthropic could overtake Alphabet for the No. 1 spot in the coming years, with potentially 10 GW of deployment by 2028.

AI labs OpenAI and Anthropic, surpassing hyperscalers Alphabet and Meta Platforms in XPU order volumes in the coming years, would make Broadcom an excellent way to benefit from increased use of generative AI, agentic AI, and potentially artificial general intelligence (AGI) -- which OpenAI and Anthropic claim to be nearing. AGI goes beyond specialized workflows, allowing models to think independently and perform tasks across different use cases.

Widespread adoption of AI-powered tools would increase demand for cost-effective compute and, in turn, provide Broadcom with a long runway for growth in AI revenue. However, as Broadcom becomes more dependent on AI labs, it will also become more vulnerable to a slowdown in AI capex spending.

A top dividend growth stock for AI investors

At 29.1 times forward earnings, Broadcom is far from a dirt cheap stock. But it stands out as one of the most balanced AI stocks for investors who value a growing dividend.

However, being heavily dependent on order volumes from a handful of customers is a double-edged sword that's accelerating growth now but could eventually make Broadcom's AI revenue so large that it dwarfs its non-AI semiconductor and software segments. If that were to happen, Broadcom would become more of a pure-play AI stock like Nvidia, which generates around 92% of its revenue from data centers. And Broadcom will be far more vulnerable to a slowdown in AI spending.

Therefore, investors should only buy Broadcom if they believe in sustained compute demand increases from OpenAI and Anthropic.

Daniel Foelber has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Alphabet, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.