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Broadcom (NASDAQ: AVGO) is playing a key role in supplying data centers with custom chips and networking products. Strong revenue and free-cash-flow growth have pushed the stock to new highs this year, with shares up 54% year to date through market close Oct. 13.

The stock is up more than 500% since the end of 2022, when the artificial intelligence (AI) boom started. However, there are important reasons why the stock will likely climb higher in 2026 and beyond.

Image source: Getty Images.

Broadcom is printing cash

Broadcom has a long history of delivering profitable growth, which has led to market-beating returns. Its free-cash-flow growth has accelerated over the last year. Free cash flow through the first three quarters of fiscal 2025 was 40% larger than the year-ago period. This shows Broadcom’s margins expanding from higher sales of custom AI accelerators and strong growth from its software business.

Its order backlog hit a record $110 billion, which is significantly higher than its trailing-12-month revenue of $60 billion. Spending on AI infrastructure by hyperscalers is expected to reach $350 billion this year, meaning more money could be headed Broadcom’s way. Data center spending is expected to grow into the trillions by the end of the decade.

Broadcom’s cash-rich business should fuel investment in more innovation that rewards shareholders. This is a quality semiconductor stock to profit off of the AI boom.

John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

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Nvidia‘s (NASDAQ: NVDA) powerful chips are used in almost every data center and cloud service provider for the most advanced artificial intelligence (AI) workloads. Its stock has rocketed over 30,000% over the last 10 years, making Nvidia the most valuable company in the world with a market cap over $4.6 trillion at the time of writing.

But Nvidia’s management mentioned one number on the company’s last earnings call that stunned analysts, and it’s why the stock is still a no-brainer buy.

Image source: Nvidia.

A multitrillion-dollar opportunity

During Nvidia’s fiscal second-quarter 2026 earnings call, CFO Colette Kress said, “We see $3 trillion to $4 trillion in AI infrastructure spend by the end of the decade. The scale and scope of these build-outs present significant long-term growth opportunities for Nvidia.”

This statement further builds the case that Wall Street is still underestimating the magnitude of the AI opportunity for Nvidia. AI model builders like OpenAI, which use Nvidia’s chips, are seeing more demand than they have computing capacity. This is why there has been a rush to secure more data center capacity this year by tech companies.

Despite Nvidia‘s data center revenue growing 56% year over year last quarter, investors can still buy the stock at a very reasonable earnings multiple of 30 based on next year’s earnings estimate.

John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

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Key Points

• Every growth investor should be closely monitoring AI stocks.

• If I could only buy one AI stock, this would be it.

• 10 stocks we like better than Nvidia ›

When it comes to growth investing, finding businesses that can grow by leaps and bounds for decades to come is a dream. But that’s what many popular artificial intelligence (AI) stocks today offer. If I could only buy one AI stock, the GPU manufacturer below would be it.

Nvidia is my top choice for every growth investor

In my opinion, every growth investor should be paying close attention to Nvidia (NASDAQ: NVDA). In fact, I think it should top your watch list of companies to consider investing in. That’s because the company sits at the center of the AI revolution. The United Nations predicts AI spending will grow by more than 30% annually for the next decade. Most longer-term forecasts believe this growth should be sustained for many years to follow. Being at the center of this industry, therefore, is a great place to be.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

What makes Nvidia so special? It’s the leading producer of GPUs — specialized components that make most artificial intelligence and machine learning tasks possible — for the entire AI industry. Many estimates believe the company has a market share of 90% or more. This dominant market share is fueled by early investment and a powerful software platform that keeps users embedded within Nvidia’s ecosystem.

Nvidia is facing some short-term headwinds due to the ongoing trade war between the U.S. and China. But long term, there’s no denying that the firm will benefit immensely from rising AI spending, a trend that could persist for quite a while. If you’re new to growth investing, Nvidia needs to be one of the first companies you consider for your portfolio.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

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