NVIDIA‘s (NASDAQ: NVDA) historic rise in market value highlights the potential for other companies to join the trillion-dollar club. We identify three stocks with strong AI exposure and growth potential: Broadcom (NASDAQ: AVGO), Taiwan Semiconductor (NYSE: TSM), and ASML (NASDAQ: ASML). 

Three AI Stocks That Could Join the Trillion-Dollar Club Next

 

Highlights from 24/7 Wall Street Analysts Eric Bleeker and Austin Smith’s discussion can be found below.

• It’s hard to believe, but headed into 2023 NVIDIA wasn’t worth a trillion dollars. In fact, it was worth about $350 billion.
• The company sits closer to $3 trillion today, even after a few rough market days that have brought it down from peak levels.
• Here are three companies with strong ties to AI revenue that are contenders to surpass the trillion-dollar barrier.

Stock Number 1: Broadcom

• Market cap of a bit under $800 billion at the time of filming (down to $741 billion at today’s market close). 
• Dividend yield of still 1.2%.
• The company has been compared to a big “private equity” conglomeration with software, hardware, and semiconductor business lines. 
• The key headline is they’ve quietly become the number two for AI revenue in processing behind NVIDIA.
• Custom processors are big business. Broadcom is estimated to bring in more than $8 billion in sales from Google alone this year!
• Another massive tailwind is networking, which in their recent earnings call they said is moving from 20% their AI revenue mix up to 40%. Only Broadcom and NVIDIA really offer the complete package of networking and processors for next-generation data centers.
• After some selling in recent days, they’re back to about 25X adjusted 2025 earnings. Not cheap, but the enthusiasm coming out might be a nice opportunity to enter the stock if you haven’t.
• Broadcom definitely has the end markets to make a run at a trillion in market cap.

Stock Number 2: Taiwan Semiconductor 

• Taiwan Semiconductor has long been held back by geopolitical risk and that situation is not going away. The company is located in Taiwan and there will always be the risk the island is invaded. 
• However, their placement at the center of AI has simply become too compelling and Taiwan Semi’s stock has been on an incredible run recently. 
• The company is at a similar market capitalization to Broadcom (about $750 billion at today’s market close). 
• Taiwan Semi also has a few powerful catalysts coming up.
• First is their largest customer is Apple, and the company may see a very large upgrade cycle as customers upgrade phones to utilize new Apple Intelligence features.
• Second is that Taiwan Semiconductor has signaled they’ll be raising prices on customers like NVIDIA, which should be a catalyst for margin improvement and earnings growth.
• Finally, their main rival in advanced semiconductor manufacturing is Samsung, and there are reports Samsung has been struggling getting newer technology nodes online. This could lead to added market share for Taiwan Semiconductor.

Stock Number 3: ASML 

• ASML is the smallest of the group, trading for a bit less than $400 billion in market capitalization. 
• The company’s main selling point is they have a monopoly on the technology needed to keep making the essential part of chips – the transistors – smaller. That technology is named EUV, or extreme ultraviolet lithography.  
• The big question is how much ASML can keep increasing profits. 
• The company is currently at about $8 billion in profits in the past twelve months.
• If we go back to 2014, that number was about $1.7 billion
• If their next decade was similar, and in many ways it could stand to be better thanks to the growth of AI, we would get to about $30 to $35 billion in profits which could support a trillion-dollar valuation.

Transcript:

Eric, it’s hard to believe, but headed into 2023, Nvidia was not worth a trillion dollars. And in fact, it was worth about $350 billion. So it was a long way from a trillion-dollar market cap.

And today, it currently stands at over $3 trillion, I believe $3.2 or $3.3 at the time of this filming. So I’m not saying that any stock can exactly repeat Nvidia’s performance here. It’s certainly been a heroic and notable run.

But hey, there are a number that could become the next member of the trillion-dollar club. So I’m curious, what are your top three stocks right now that you think could make the break into the vaunted trillion-dollar market cap club?

Yeah, isn’t that incredible, Austin? I had to do a double take earlier when I was looking at their market cap entering 2023, and it really shows the potential for leaders in artificial intelligence in the current market.

So I’ll focus on three stocks, all with AI exposure, that I think have an excellent chance of joining the trillion-dollar club, some as soon as this year, some within the next decade.

First of all is Broadcom. It has a market cap of a bit under $800 billion as we film this. It is a stock with excellent financial discipline, good management. It’s been called a private equity conglomeration with software, hardware, and semiconductors all part of it.

It pays a dividend yield of 1.2%, which is nothing to scoff at. And the headline is they’ve quietly become the number two company for AI revenue and advanced processors behind Nvidia.

They’re custom processors. They’re a big business. They’re expected to receive more than $8 billion just from Google this year alone for designing their custom processors.

Another massive tailwind is networking, which in their recent earnings call, they say is moving from 20% of their AI revenue mix to 40%. The bottom line is only them and Nvidia really offer the complete package you need for next-generation data centers of networking and processing.

So that’s an attractive place to be right now. After some selling in recent days, they’re back to around 25 times adjusted 2025 earnings. That’s not cheap, but some of the enthusiasm kind of coming out of AI stocks that we’ve seen recently in the market, if you’ve been sitting on the sidelines looking for a stock to pounce on, I think you should have Broadcom on your list because they have a very clear path to a trillion-dollar market cap.

Second, I’ll talk about Taiwan Semiconductor. It used to be a household name. It’s quickly becoming one, just as Nvidia had. They’ve long been held back by geopolitical risk. That’s not going away. However, their placement at the center of AI has simply become too compelling, and they’ve been on an outstanding run recently.

Their market capitalization is similar to Broadcom, about $775 billion. They have a number of near-term catalysts. First, their largest customer is Apple, which may be seeing a super cycle thanks to demand for AI features in their iPhones. That’s going to be a powerful tailwind for Taiwan Semiconductor if it materializes.

Second, they’re able to push through price increases, it would seem, from some recent quotes from the company on some of their biggest customers like Nvidia. That’s going to be a catalyst for the company.

And third, the story of the companies that manufacture these advanced semiconductor chips has been that it’s been whittling down from dozens of companies to just a very small handful of companies that can afford to keep moving forward.

Their number one competitor, Samsung, has been having some troubles with some of the leading-edge processes to create these most advanced semiconductors. That’s going to give Taiwan Semiconductor more pricing power. It’s going to allow them to keep customers. It’s going to be a positive tailwind for the company.

So I like how the company is positioned in the months ahead.

Finally, I want to talk about ASML. It’s the smallest company in the group. They make advanced lithography, which is basically how you print the patterns to create semiconductors. It’s worth about $400 billion.

And the headline for this company is they have a monopoly on the technology named EUV that is an absolute necessity to create the most advanced chips with the smallest transistors possible.

The big question for them is how much they can keep increasing profits. They have about $8 billion in profits in the past 12 months. If we go back a decade, they were at $1.7 billion. If the next decade is similar, we could see them at $30 to $35 billion, which I think is a number that could support a trillion-dollar valuation.

So Austin, that’s three different stocks, especially if we see a sell-off. Three great ideas that investors could look to add to their portfolio. And frankly, with a stock like ASML with a monopoly in maybe the world’s most essential technology, something that you can feel pretty easy sleeping at night owning that for the long run. So I think these are three great ideas for investors to check out right now.

Eric, I love all of these stocks. Just to recap for anyone, because there’s a lot of information in there. It’s Broadcom, Taiwan Semiconductor, and ASML. And it seems like if a company is going to breach that barrier into the trillion-dollar market cap club, they need a lot of things.

But broadly speaking, it’s going to be some combination of three. They need to be forecasting strong revenue growth, strong earnings or cash flow growth, and have great narrative.

Now, all three of these are tied to the AI narratives. They’ve got that covered. You’ve talked about how ASML could both boost revenue and profitability.

And those same trends and dynamics can apply for Taiwan Semi and Broadcom, even though they’re in different places in the industry. So all three of these companies have all three of the ingredients necessary to breach that trillion-dollar number. I love this list. Thank you so much for bringing it to investors today.

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