Prediction: This Semiconductor Stock Could Surge 70% by 2026 (Hint: It’s Not Nvidia)

Silicon sleeper awakens: Hidden semiconductor play poised for massive growth while Wall Street chases the usual suspects.

The AI infrastructure boom fuels demand beyond the obvious names

This under-the-radar chipmaker quietly powers next-generation computing while Nvidia grabs headlines. Their technology sits at the convergence of AI, edge computing, and advanced manufacturing—three sectors exploding simultaneously.

Production capacity expansion signals confidence in demand trajectory

Recent capital expenditure announcements reveal aggressive scaling plans. The company's moving faster than analysts predicted, suggesting insider knowledge of contract wins and market positioning.

70% upside potential by 2026 reflects conservative modeling

Even using traditional valuation metrics—not the fantasy math that typically inflates tech projections—the numbers point toward significant appreciation. The projection assumes moderate market share gains and ignores potential catalyst events.

Wall Street's obsession with household names creates opportunity

While institutional investors pile into the same crowded trades, this stock flies under the radar. Sometimes the best plays hide in plain sight—especially when analysts are too busy upgrading stocks that already quadrupled.

The semiconductor space remains fragmented enough for disruptors to emerge. This company's specialization in high-margin niche markets provides protection against broader industry volatility while offering leveraged exposure to tech's biggest trends.

What makes Broadcom special

Broadcom operates in two segments: semiconductor solutions and infrastructure software. Its semiconductor unit is divided into two main businesses.

Image source: Getty Images

Broadcom's primary business over the years has been networking. Its networking gear -- such as Ethernet switches and optical components -- is essential for helping MOVE massive amounts of data quickly and efficiently in data centers. Not surprisingly, networking components have become even more important with AI, as AI workloads require high throughput and low latency. So this has been a booming business for the company.

Also within its semiconductor solutions, Broadcom has long helped customers design application-specific integrated circuits or ASICs. Unlike traditional chips that can be programmed for tasks after they are manufactured, ASICs are purpose-built for specific tasks and cannot be reprogrammed. However, this sole purpose generally makes them more powerful and efficient for the tasks for which they were built. With the rise of AI, customers have recently been turning to Broadcom to help design custom AI chips.

The company also owns a large infrastructure software business built through acquisitions like CA Technologies, Symantec, and VMware. VMware is really the crown jewel of the bunch, a market leader in virtualization, which lets multiple VIRTUAL machines run on a single server to help lower customer costs. Its VMware Cloud Foundation platform, meanwhile, is benefiting from the AI buildout, as it lets enterprise customers manage AI workloads across public clouds and their own on-premise data centers. This also keeps them from being locked into a single cloud computing provider.

While many of Broadcom's businesses benefit from AI, its biggest opportunity is in custom AI chips. The cost of's (NVDA -0.82%) GPUs has soared as demand has outstripped supply, and hyperscalers (owners of large data centers) are looking for cheaper and more efficient ways to run inference at scale. Unlike training, which is a one-time event, inference runs constantly, which means the cost savings from a well-designed custom chip can compound over time.

Broadcom already proved it can deliver by working with to create its tensor processing units (TPUs), which now help power Google Cloud. That success opened the door to new customers likeand ByteDance, which are developing their own chips with Broadcom's help.

The company recently surprised investors by revealing that a fourth major customer, widely believed to be OpenAI, has placed a massive order for next year. This shows how quickly Broadcom can go from design to production and highlights just how much demand there is for alternatives to general-purpose GPUs. OpenAI is also planning a massive data center buildout over the next few years with, so the upside could be huge for Broadcom. On top of that,is also reportedly working on its own AI chips with Broadcom and could become another significant customer.

Where the stock could be headed in 2026

Analysts project that Broadcom will generate $63.3 billion in revenue in fiscal 2025, which ends in early November. With the company saying its first three AI chip customers are a $60 billion to $90 billion serviceable market opportunity in fiscal 2027, and OpenAI (we think) already placing a $10 billion order for fiscal 2026, the opportunity in front of it is huge. That doesn't even include the strong possibility that Apple is also a revenue-producing AI customer by fiscal 2027.

Given this momentum, it wouldn't be surprising if Broadcom could double its revenue over the next two years to around $127 billion in fiscal 2027. Custom chips can carry a higher gross margin, so let's say its adjusted gross margin moves up slightly to 80%, while adjusted operating expenses rise moderately to around $9 billion. Apply a 20% tax rate, and it WOULD have a net income of about $74 billion, or about $14.80 per share, based on its current share count (5 billion diluted shares).

Place a forward price-to-earnings (P/E) multiple of 30 to 40 on $14.80 in fiscal 2027 EPS, and the stock could be worth between $445 and $600 a share by the end of 2026. While that multiple may seem high, it takes into account the future growth Broadcom could see as custom AI chip customers continue to increase.

That's a strong potential 70% upside for the stock over the next year or so.