TSMC, Broadcom on track to join $4T club by 2028—analyst

The analyst's thesis centers on two hardware suppliers positioned to double in market value by 2028 or 2029, propelled by structural demand for AI chips. TSMC, currently valued at $2.2 trillion, manufactures the logic chips that power nearly every AI computing company in the industry, including Broadcom. During TSMC's latest earnings call, CEO C.C. Wei stated that chip demand looks strong through at least 2029 to 2030, providing multiple years of growth visibility. Management underscored its confidence by announcing another $100 billion investment in Arizona facilities, signaling that production capacity expansion remains necessary to meet demand.

Broadcom, presently a $2 trillion company, operates from a different playbook. Rather than producing general-purpose graphics processing units (GPUs), it partners with AI hyperscalers—including Alphabet—to design and manufacture custom AI chips tailored to specific workloads. These purpose-built chips can outperform GPUs in certain applications while lowering the cost per unit of compute, making them attractive to capital-intensive hyperscalers. CEO Hock Tan told investors that Broadcom's AI semiconductor business will generate more than $100 billion during 2027, representing a major increase from current levels.

To reach $4 trillion, both companies require significant valuation expansion. The analyst applies a 30× price-to-earnings multiple to 2028 earnings projections, reasoning that their above-average growth, strong execution, and market position justify such a multiple. Wall Street analysts project TSMC will earn $24.46 in earnings per share (EPS) for 2028; at a 30× multiple, that prices the stock at $733 per share, representing 71% upside from current levels and yielding a market cap of $3.74 trillion—just short of the $4 trillion target. The analyst notes, however, that TSMC has consistently outpaced Wall Street's growth projections and expects the company to surpass the threshold with modest outperformance.

Broadcom presents a similarly tight calculation. Wall Street expects $21.28 in 2028 earnings, which at a 30× P/E yields a stock price of $638, implying 52% upside. However, the analyst argues that Wall Street is substantially underestimating the impact of custom AI chip adoption across multiple hyperscalers, which could drive several years of strong earnings growth. The analyst also highlights that only two long-term 2028 estimates exist for Broadcom, suggesting bearish analysts may be skewing sentiment. By 2029, the analyst expects both companies will have decisively crossed the $4 trillion threshold.