1 Stock to Own for the Next Decade

Every once in a while, a company comes along that feels like the rare exception, a business so well-positioned, diversified, and forward-looking that it could anchor a portfolio for years.

Broadcom is one of those companies and it might be the single best position to hold for the foreseeable future.

Key Points

• Broadcom combines cyclical chip sales with high-margin recurring software revenue from acquisitions like CA, Symantec, and VMware.

• It supplies essential networking and custom chips for hyperscale AI data centers, with AI revenue projected to jump to nearly $20B this year.

• Despite an 9x five-year rally, Broadcom still trades at fair multiples, with mid-20% growth forecasts, strong cash flow, dividends, and buybacks.

A Bold Push Into Software

What really separates Broadcom from most chip peers is how aggressively it diversified beyond semiconductors.

In 2018, it stunned the market by acquiring CA Technologies for nearly $19 billion, signaling that it wanted to be more than just a chipmaker.

A year later, it scooped up Symantec’s enterprise security business. Then in 2023, it sealed the $69 billion acquisition of VMware, planting a flag squarely in cloud infrastructure and virtualization.

That’s important because Broadcom has always had heavy exposure to Apple, which still represents about a fifth of its semiconductor revenue. The software mushrooming not only balanced the business but also created stable, recurring revenue streams that smooth out the ups and downs of the chip cycle.

And it’s not obvious to many that Broadcom’s software margins are north of 70%, far higher than its chip business. That means every incremental dollar of software sales does more for long-term profitability than a dollar of hardware.

Broadcom and the AI Boom

The real rocket fuel, though, has been AI. While NVIDIA grabs headlines for its GPUs, Broadcom supplies the networking and custom accelerator chips that make hyperscale AI data centers function.

In other words, without Broadcom’s technology, Nvidia’s GPUs couldn’t move data fast enough to train massive AI models.

What most people don’t realize is that Broadcom has deep, sticky partnerships with hyperscalers like Google, Meta, and Microsoft, designing custom chips that are tailored for their needs.

Once a company like Google designs its AI architecture around Broadcom’s silicon, switching vendors isn’t easy. That’s a moat NVIDIA doesn’t have in networking.

Valuation Is Still Reasonable Despite the Run

Broadcom’s stock has skyrocketed more than 9x over the past five years, but it still isn’t outrageously priced.

At roughly 27x forward EBITDA, Broadcom trades at a discount to many high-flying AI names. Analysts expect revenue to compound at 23% annually through 2027.

To put that in perspective, Broadcom is growing nearly as quickly as NVIDIA on the top line, but with more diversification across chips and software. And unlike many pure AI plays, it throws off massive free cash flow of more than $17 billion last year alone.

Why Broadcom Is Built for the Long Haul

Broadcom’s strength lies in balance. It’s not just an AI story, not just a chip story, and not just a software story, but all of the above.

Its strategy of pairing high-margin, recurring software revenue with explosive AI hardware growth makes it a rare blend of stability and upside.

And management has shown it isn’t afraid to keep swinging big. With its acquisition track record, don’t be surprised if Broadcom continues to bolt on businesses that deepen its moat in infrastructure, cloud, or even AI-driven software.

So, if forced to own a single stock for the next decade, Broadcom looks like the smart bet. It’s diversified, it’s essential to AI’s future, and it’s priced at a level that still leaves room for serious long-term gains