Microsoft is the fourth-largest company in the world with a market cap of $3.5 trillion, reaching this position thanks to its diversified businesses that are benefiting from the growing adoption of artificial intelligence (AI). From cloud computing to productivity to gaming, Microsoft offers a range of products and services that have been driving healthy growth for the company. However, there's another tech stock that has been outperforming Microsoft over the past year.
This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.
Continue » Shares of Broadcom (NASDAQ: AVGO) have appreciated 28% over the past year, while Microsoft stock has dropped 7%. Broadcom is currently the eighth-largest company in the world with a $1.9 trillion market cap. I won't be surprised to see this semiconductor giant rise substantially and join Microsoft in the $3 trillion market cap club.
Let's look at the reasons why. Broadcom's custom AI processors and networking chips put the company in a terrific position to deliver healthy growth. The company's revenue in the first six months of fiscal 2026 increased by 39% year over year to $41.5 billion.
However, Broadcom anticipates serious acceleration in growth in the recently concluded fiscal Q3. The company expects an 84% year-over-year jump in revenue for the quarter to $29.4 billion. Broadcom's booming AI chip business will drive this outstanding growth.
The company estimates that its AI revenue in fiscal Q3 increased by more than 200% year over year to $16 billion. The good news for investors is that Broadcom predicts further growth in its AI revenue in fiscal 2027. The chip designer sees its AI semiconductor revenue exceeding $100 billion next fiscal year, which would translate into a substantial uptick in its quarterly revenue run rate compared with this year.
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