Broadcom has been dominating the tech industry for years, but is its growth stock still a buy in 2026? The company’s incredible returns and recent partnership deals make it a compelling story, but with potential risks on the horizon.
In 2019, Broadcom began to accelerate its sales growth, driven by the rise of artificial intelligence (AI) chips. Over the last year alone, its stock has more than quadrupled Nvidia’s market-beating returns. This is thanks in part to partnerships with Alphabet, Meta Platforms, and Microsoft, which are giving Broadcom access to a vast pool of customers.
However, Broadcom’s position as the “Switzerland” of AI chip manufacturers is not without risks. Its valuation ratio is 100 times trailing earnings, making it pricey compared to Nvidia, which trades at 50 times trailing earnings. Additionally, there are concerns that Broadcom’s clients and partners could eventually go their own way, removing billions of dollars from its revenue.
Despite these challenges, the data suggests that Broadcom is still a buy for 2026. Its sales growth has been consistently high, with an average analyst firm expecting a 23% increase in revenue next year and a 36% jump in 2027. This makes it a compelling growth story even at current valuations.
But investors should be prepared for some white-knuckle moments ahead. With Broadcom’s valuation ratio so high, any misstep could send its stock price crashing down. As one analyst noted, “it doesn’t take many mistakes to send stock prices plummeting.”
Ultimately, the future of Broadcom’s growth stock is uncertain, but its position as a leader in the AI chip market makes it a story worth watching in 2026.
Source: https://www.fool.com/investing/2025/12/09/this-growth-stock-continues-crush-the-market