Broadcom's market capitalization has surpassed $1.6 trillion, with its stock rising nearly 700% over the past five years. In the fourth quarter, the company reported a 28% year-over-year increase in net revenue.
The artificial intelligence revolution is shifting from training large language models to deploying them in real-world applications. This next phase, known as AI inference, involves models ingesting new data to produce predictions, make decisions, and solve problems.
Broadcom's semiconductor chips and software are fundamental components enabling other companies to deploy AI systems. The company specializes in application-specific integrated circuits, which are purpose-built for specific workloads, unlike the more flexible graphics processing units from Nvidia and AMD. This specialization can help data center operators reduce costs and improve efficiency.
A global shortage of high-end chips gives chipmakers significant pricing control. The chip market is projected to grow at a compound annual rate of 16.1%, potentially reaching $1.6 trillion annually by 2030, according to BCC Research.
Broadcom faces competition from Nvidia, the world's largest company by market cap. However, the company serves major tech clients, including Alphabet, Meta Platforms, and Apple.
Broadcom's stock has increased 58% over the past 12 months and pays an annualized dividend of $2.60 per share, yielding about 0.75% at current prices. The company is among fewer than a dozen globally with a market cap above $1 trillion.
In its latest earnings report, Broadcom cited a 28% increase in net revenue, a 97% increase in net income, and a 93% increase in earnings per share year over year.
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