Where Will Broadcom Stock Be in 3 Years?

Harsh Chauhan, The Motley Fool

Tue, Jun 17, 2025, 3:25 AM 5 min read

• Broadcom stock outperformed the broader semiconductor sector by a big margin in the past three years, and that trend is likely to continue thanks to artificial intelligence (AI).

• The company's top line could very well exceed Wall Street's expectations over the next three years, which is why it could continue to outperform the broader market.

• 10 stocks we like better than Broadcom ›

Broadcom (NASDAQ: AVGO) stock has absolutely crushed the broader market over the past three years, registering eye-popping gains of 381%, as compared to the 93% gains clocked by the PHLX Semiconductor Sector index during the same period.

So, an investment of $1,000 in Broadcom stock three years ago is now worth over $4,813. The good part is that this semiconductor giant seems built for more upside over the next three years, as it now has a new growth driver in the form of artificial intelligence (AI).

Let's see how AI is moving the needle for Broadcom and check how much upside this semiconductor stock could deliver in the next three years.

Broadcom recently announced results for the second quarter of fiscal 2025 (which ended on May 4). The chipmaker's revenue in the first six months of the fiscal year increased by 22% from the year-ago period to almost $30 billion. This puts Broadcom on track to end fiscal 2025 with $60 billion in revenue at the current run rate, which would be a 16% jump over the previous fiscal year's top line.

Analysts, however, forecast a strong increase of 22% in Broadcom's revenue this year, indicating that its growth is likely to accelerate in the second half of the fiscal year. That won't be surprising, since Broadcom's AI revenue is set to grow at a faster pace. The company is forecasting a 60% increase in AI revenue in the current quarter to $5.1 billion. That will be better than the 46% year-over-year jump that the company saw last quarter.

However, this is just the beginning of Broadcom's terrific AI-fueled growth. The company is on track to end the current fiscal year with $18 billion in AI revenue (based on its fiscal Q3 forecast, which will bring its AI sales for the first three quarters to $13.6 billion). That would be a 50% increase from fiscal 2024. Broadcom, however, has a serviceable addressable market (SAM) worth $75 billion, at the midpoint of its guidance range, in AI chips.

It sees this opportunity materializing by fiscal 2027 based on the three hyperscale cloud customers that are currently deploying its AI-tuned application-specific integrated circuits (ASICs) and networking processors. But then, that opportunity could turn out to be much larger than Broadcom is projecting. AMD CEO Lisa Su estimates that the AI accelerator market could hit a whopping $500 billion in revenue by 2028.