Two AI Stocks Bound to Be Worth a Trillion Dollars

We all know the stock market is focused on AI. AI is a major reason all three major indexes have reached all-time highs, signaling a new bull market. The debut of ChatGPT in late 2022 was the clearest indicator that the new era in technology is starting and that huge internet corporations and others are investing billions in AI infrastructure.

Nvidia has benefited early on as GPU demand has exploded and other AI hardware stocks have risen. More winners will come from the revolutionary technology. Read on to uncover two AI-powered firms that could become trillion-dollar companies.

1. Taiwan Semiconductor Manufacturing When it comes to the AI boom, Nvidia may be the pick-and-shovel play, but Taiwan Semiconductor Manufacturing (NYSE: TSM) may be the better pick-and-shovel.

TSMC is the world's largest contract chip manufacturer, accounting for 55% of third-party chip fabrication and 90% of advanced chip manufacturing. Usually semiconductors and complicated components used in generative AI. Given its market dominance, the corporation is the backbone of generative AI and the semiconductor sector.

Apple, Nvidia, Broadcom, and AMD are its biggest customers. These firms are generative AI leaders or aspiring to be. TSMC's excellent chip manufacturing advantage and contacts with leading chip designers could help it grow in the AI era. As AI becomes more important in technology and the economy, the company should gain from rising chip demand.

Over 40% operating margins provide TSMC a competitive edge, and its market valuation is $709 billion. At that valuation and pace, it may reach $1 trillion in a year or two.

2. Broadcom Broadcom (NASDAQ: AVGO), worth $573 billion, is another AI stock that could reach $1 trillion in the next years. AI-driven growth is also increasing.

Known for its chip designs, the company has risen through acquisitions. Broadcom just acquired VMWare, a virtualization software expert, which will boost revenue and earnings this year. It also owns cybersecurity firm Symantec and enterprise software and DevOps provider CA Technologies.

Broadcom has acquired companies, cut expenses, and integrated them to boost revenue and profits. Broadcom doesn't make GPUs, but its switches, accelerators, and networking solutions are projected to grow in demand in the AI future. Management noted significant demand for networking gear in AI data centers and custom accelerators in its recent earnings report.

It also reported doubled AI sales to $2.3 billion in the quarter and boosted its AI revenue estimate. Broadcom increased its guidance to 35% of semiconductor revenue, or more than $10 billion, from 25%. Broadcom has large operating margins like TSMC, with a projected 60% EBITDA margin this year, indicating competitive strength.

Broadcom is well-positioned to profit from the AI boom with numerous strategies. A 70% market cap growth over the next three years is possible for the diversified semiconductor behemoth, making it worth $1 trillion.

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