Broadcom is one of my strongest long-term AI bets and most convincing direct AI-infrastructure exposure via custom AI accelerators, networking, and software. Shares trade around 370 while models indicate fair value near 470; profit is expected to grow 70% this year and next, leaving forward P/E 18.6 and PEG below one.

This trend is towards custom AI chips, with the second company on our list being Broadcom (AVGO), a leading force in the field of custom AI chips. If I were to put an investment portfolio into the field of artificial intelligence for 5 years, it would be very difficult to exclude Broadcom from that list.

Because Broadcom has positioned itself at the intersection of two tremendous opportunities: dedicated AI accelerators and AI networks. These are two areas that I believe could become more important over the next five years.

Giant cloud computing companies are spending billions on artificial intelligence computing. But when they spend all that money, they prefer chips that do exactly what they want, and that serve their specific business needs.

This is where custom chips and Broadcom come into play. You can buy generic graphics processing units from companies such as Nvidia or AMD. But what if you're handling huge amounts of very specific workloads?

What if you could develop an improved chip for your AI models and infrastructure? This is likely to lead to improved performance-to-cost or energy efficiency for certain applications.

That is the opportunity behind dedicated AI accelerators, often called ASICs or, as I prefer to call them, application- specific integrated circuits . Broadcom helps major technology companies design and develop these specialized chips.

And I want to clarify something very important. Custom chips do not necessarily replace Nvidia or AMD in all workloads. Different applications have different computing requirements .

But the broader AI market cannot support multiple infrastructures. This is why Broadcom's website is so interesting.

Returning to the Investing Pro platform, we see that Broadcom shares remained flat for most of last year, rising by only 2%, and its market value currently stands at 1.7 trillion.

Regarding AMD, she stated that we can be more patient. But with Broadcom, the valuation seems very convincing because we have a classic example of a stock price that doesn't move as you just saw, yet the company's financials continue to rise.

Revenue is rising, cash flow is rising, and operating income is rising.

Broadcom stock is currently trading around 370 per share . But when you open the Investing models, you can see that all fourteen models used indicate a fair value of around 470 for the stock at the moment .

This means it indicates a stock value that is approximately 30% higher. Furthermore, analysts are forecasting a 12-month price target for the stock of 531. There is a significant opportunity for it to rise above the current price level.

Profits are expected to grow by 70% this year, and by another 70% next year. Assuming that the target average earnings per share for fiscal year 2027 is $19.39, Broadcom shares are currently trading at a forward price-to-earnings ratio of 18.6 times.

With the growth we just mentioned, the price- to-earnings-growth (PEG) ratio is well below one.

The growth achieved by some of these companies is truly insane, and stock prices will eventually follow the growth of those profits. Meanwhile, I like to call this period the consolidation phase.

As for management, they have already set very optimistic revenue targets, not only for next year, but for the year after that as well, demonstrating the size of the opportunity available in the field of custom chips.

But there is another reason why I love Broadcom. The company also has a large business in the field of infrastructure software . This gives it a source of revenue and cash flow outside of semiconductor operations.

This does not eliminate the risks for the company, but it creates a broader business model than just a company specializing in artificial intelligence chips .

Over the next five years, I will be monitoring three things. The first is to continue adopting dedicated artificial intelligence accelerators. Secondly, there is a need for faster networks as AI clusters continue to grow .

Third, Broadcom's ability to convert its growing revenues into free cash flow. Because ultimately, revenue growth is exciting, but it's cash flow that creates lasting value for shareholders.

Of the five companies, Broadcom is one of my strongest long- term bets, as it combines investment in dedicated AI computing, networking, and a well-established software business.

Broadcom and Marvel compete in certain areas. Ultimately, and to varying degrees, all five companies depend on the continued demand for artificial intelligence infrastructure .

Therefore, owning all five stocks does not automatically mean that you have diversified investments. But before I answer, yes , I own all five shares. I will look forward to building larger centers in these five names.

Broadcom would be one of my most convincing choices for direct exposure to AI infrastructure.