This stock has averaged annual gains of nearly 40% over the past decade, and it’s still not wildly overvalued.
Data centers are growing rapidly, as they’re needed for artificial intelligence (AI) operations.
According to S&S Insider, the data center GPU market had a market value of $23.87 billion in 2024, but is expected to grow at a compound annual growth rate (CAGR) of 30.5% through 2032, reaching $201.64 billion. Companies that build data centers and those that sell the technology they house are therefore poised to profit — handsomely.
Image source: Getty Images.
One such company is Broadcom (AVGO +0.13%), which produces custom chips for AI. It’s a leader in application-specific integrated circuits (ASICs), which help customers’ designs become physical semiconductor chips that can be manufactured at scale.
Today’s Change
(0.13%) $0.44
Current Price
$331.17
Key Data Points
Market Cap
$1.6T
Day’s Range
$328.34 – $338.11
52wk Range
$138.10 – $414.61
Volume
980K
Avg Vol
30M
Gross Margin
64.71%
Dividend Yield
0.73%
The company has been growing at a robust clip, with full-year revenue for 2025 up 24% year over year, and net income up 42%. How has such growth translated into stock gains? Check it out:
|
Time period |
Average annual return |
|---|---|
|
Past 3 years |
77.73% |
|
Past 5 years |
47.96% |
|
Past 10 years |
38.94% |
|
Past 15 years |
37.62% |
Source: Data from Morningstar.com as of Jan. 23, 2026.
Crazy, right? Clearly, investing in Broadcom might boost your wealth substantially, especially over many years. Let’s imagine you invest $1,000 in Broadcom and it grows at 25% over the next 10 years. You’ll end up with about $9,300. Over 20 years? More like nearly $87,000. And those numbers are just for a single small investment. Invest in the company routinely, and you could end up with much more. A $1,000 investment in Broadcom annually, growing at 25% for 20 years, could get you to $345,000!
Best of all, Broadcom’s stock seems reasonably priced, unlike many stocks that are heavily into AI. Broadcom’s recent forward-looking price-to-earnings (P/E) ratio of 34 isn’t out of line for a company reporting its double-digit gains. Better still, Broadcom is a dividend-paying stock, recently yielding 0.8% and likely to increase its payout over the coming years.
So, investing some of your long-term dollars in Broadcom is a reasonable strategy to create wealth over time in your portfolio.
