Strong AI Tailwinds and Chip Innovation Driving Broadcom’s (AVGO) Growth Outlook

Broadcom Inc. (NASDAQ:AVGO) is one of the best big tech stocks to buy right now. A nearly 35% rally so far in the year has brought Broadcom to the trillion-dollar market cap club. As per recent Bloomberg data, the company is expected to post sales growth of more than 20% both in 2025 and 2026. With that, there are already discussions about whether it should be considered as the next substitute in the Magnificent Seven.

A technician working with a network switch in a remote environment.

Broadcom has benefitted from its custom chip design and networking semiconductor businesses, which help it capitalize on the AI spending. As evidence of its innovative solutions, the company launched its Jericho4 networking chip in early August. This product significantly boosts data capacity, enabling faster connections across multiple smaller data centers to function as a single extensive AI system.

With the ability to link over a million processors and move four times more data than its predecessor, Jericho4 addresses the power and space constraints of large-scale GPU clusters. This positions Broadcom to benefit from rising demand for AI workloads, cloud scalability, and low-latency computing in metropolitan data hubs.

Analyst opinions are overwhelmingly positive currently. In that regard, on July 30, Morgan Stanley raised its price target on Broadcom to $338 from $270 while keeping an Overweight rating on it, citing a strong long-term outlook for AI-exposed semiconductor companies.

Broadcom Inc. (NASDAQ:AVGO) is a global technology company that designs, develops, and supplies a wide range of semiconductor and infrastructure software solutions.

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Disclosure: None. This article is originally published at Insider Monkey.