Growth stocks continue to lead the market higher, and with artificial intelligence (AI) still in its early innings, that looks like the strong growth could continue over the next few years. Even though the market is trading near all-time highs, there are still plenty of stocks with good upside from here.
Let's look at three stocks with huge growth opportunities still in front of them that could soar by 2028.
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1. Broadcom
As the AI market starts to shift toward inference, Broadcom (AVGO +2.02%) is in great shape. Companies don't want to be totally reliant on Nvidia's graphics processing units (GPUs), so they are increasingly turning to Broadcom to help them develop custom AI chips. Custom AI chips are particularly useful for inference, given inference's comparative simplicity versus training and ongoing costs. This makes custom chips that can run inference workloads at a lower cost a great alternative for large hyperscalers (companies that own massive data centers).
NASDAQ: AVGO
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Broadcom has already helped Alphabet (GOOGL +1.71%) (GOOG +2.00%) design its tensor processing units (TPUs), and that win led to Meta Platforms and ByteDance also becoming customers. Broadcom has said those three alone could represent a $60 billion to $90 billion opportunity by fiscal 2027, which is more than double the total revenue it will generate in fiscal 2025.
However, it doesn't end there. A fourth customer, widely believed to be OpenAI, has already placed a $10 billion order for next year. OpenAI and Oracle are talking about spending $300 billion on data centers in the coming years, so Broadcom has a big opportunity if it can win even just a small slice of this business. Apple is also reportedly working on AI chips with Broadcom, which could be another needle mover.
Given its massive opportunity in custom AI chips over the next few years, Broadcom's stock could trade much higher by 2028.
2. Taiwan Semiconductor Manufacturing
Another company poised to benefit from the ongoing AI infrastructure buildout over the next few years is Taiwan Semiconductor Manufacturing (TSM +1.97%). It's the only foundry that can consistently manufacture advanced chips at scale with strong yields. Intel has tried to catch up for years and is still losing money in its foundry business, while Samsung has stumbled with yields and even lost Google's Tensor G5 production to TSMC.
TSMC's success comes from its ability to manufacture chips at small node sizes while getting strong yields. Shrinking node sizes is important for advanced chips, like GPUs, as it increases the number of transistors that can fit on a chip, which makes them more powerful and energy efficient. Meanwhile, manufacturers need a high percentage of the chips they make to be defect-free. A higher yield means a lower cost per chip and a greater number of usable chips from each production run.
NYSE: TSM
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This ability has led TSMC to become a critical partner to chip designers and also given it strong pricing power. It currently projects that AI chip demand will grow at a more than 40% compound annual growth rate (CAGR) through 2028. It will reportedly raise prices by up to 10% next year, which will be another growth driver on top of strong demand.
TSMC is the one company every major chip designer has to use to get chips made. It is basically selling shovels in a gold rush, which makes it a strong stock to own over the next few years.
3. Alphabet
Alphabet has managed to turn what many thought was a big risk into a growth driver. People worried that AI chatbots would hurt Google Search, but search growth actually picked up last quarter, and new AI features are leading to more search queries. Meanwhile, its Gemini AI chatbot is gaining steam, with the Gemini app recently becoming the most downloaded app on the Apple App Store, surpassing ChatGPT.
NASDAQ: GOOGL
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Meanwhile, the biggest risk the stock faced is now behind it. Despite losing its antitrust case to the Department of Justice, a federal judge allowed the company to not only keep its Chrome browser and Android operating system, but also the main tenets of its search deal with Apple in place. This means Alphabet still controls the main gateways to the internet for billions of users.
Google's biggest growth driver, though, is cloud computing. Alphabet is one of the few companies with its own AI models, custom chips, and cloud infrastructure, which should help margins over time. This vertical integration should become a significant advantage in the coming years.
Meanwhile, its Waymo robotaxi business is expanding rapidly throughout the U.S. and could become a big contributor over the next few years. This is a significant opportunity that often gets overlooked by investors.
Overall, Alphabet is set up well to see strong growth through 2028 and beyond, and its stock has a lot of potential upside over the next few years.
