Three Trillion Footnotes & Future Dividends

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The Guild of Alchemists – or, as they’re more commonly known these days, the stock market – maintains a rather exclusive club. Membership isn’t based on good deeds, or even particularly clever spells, but on sheer monetary weight. Currently, only Nvidia, Apple, and Alphabet have managed to accrue enough gold-backed digital certificates to qualify. Microsoft is hovering, naturally, fluctuating with the whims of the market like a particularly capricious weather spirit.1

I suspect two further contenders will join their ranks within the next three years. Taiwan Semiconductor Manufacturing (TSM) and Broadcom (AVGO), both purveyors of essential components for the increasingly frantic world of digital conjuring. They have some way to go, mind you. TSMC currently boasts a valuation of $1.75 trillion, Broadcom a respectable $1.59 trillion. To reach the three trillion mark, they require growth of 71% and 89% respectively. A significant undertaking, but not entirely improbable. Especially when one considers the sheer, unbridled demand for… well, everything digital.2

Should either achieve such growth, it would represent a sound investment. A truly genius buy, as some might proclaim. I believe both are primed to rise, and a prudent investor would position themselves accordingly. Not for the thrill of the chase, naturally. But for the dividends. Oh, the lovely, predictable dividends.

The AI Build-Out: Feeding the Digital Beast

Broadcom and TSMC have both benefited handsomely from the recent surge in spending on AI infrastructure. And, frankly, it shows no sign of slowing. 2026 promises another year of record-setting expenditures on data centres, vast, humming cathedrals dedicated to the processing of artificial intelligence. One wonders if the machines themselves will eventually start paying dividends.3

TSMC’s strength lies in its neutrality. They are, essentially, the world’s leading producer of logic chips, a position that allows them to profit from whichever company currently believes it is winning the AI race. It doesn’t matter if it’s the Gnomes of Google or the Elves of Apple; TSMC happily provides the foundational components. They’re simply rooting for continued AI spending, a remarkably safe bet, all things considered.

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Broadcom, on the other hand, is focusing on custom AI chips. Rather than building broad-purpose computing units – the digital equivalent of a general-purpose wizard – they’re designing bespoke solutions tailored to specific end-users. This allows for incredibly efficient processing, as the chip is optimised for a single task. It’s a bit like commissioning a golem specifically to polish your boots; it’s utterly impractical, but remarkably effective.

These custom chips won’t entirely replace broad-purpose units, of course. You still need a general-purpose wizard for… well, everything else. But there’s a substantial market opportunity, and Broadcom is well-positioned to capitalise on it. And, more importantly, to generate a healthy stream of dividends.

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Both companies possess a solid investment thesis. But which will reach the three trillion mark first?

Broadcom to Beat TSMC: A Prediction (and a Slight Wager)

While TSMC currently holds a lead, I suspect Broadcom will reach the three trillion valuation a year sooner. By the end of 2027, Broadcom anticipates its AI chip business will generate $100 billion in revenue. In the first quarter of fiscal year 2026, that same business brought in $8.4 billion. Impressive growth, to be sure. Wall Street analysts seem to agree, projecting earnings per share of $17.54 by the end of 2027. A price of 40 times earnings – ambitious, perhaps, but justifiable given the growth rate – would value the stock at $701 per share – a 109% rise. A delightful prospect for any dividend hunter.

TSMC has a bit more work to do. It’s not growing as quickly as Broadcom, but believes it can maintain a 25% compound annual growth rate between 2024 and 2029. If it delivers, and the stock price rises in tandem, it would lead to a 95% increase. With TSMC trading at a reasonable valuation (32 times trailing earnings), this projection seems plausible. And makes Taiwan Semiconductor a strong contender to join the three trillion club by 2028. A perfectly acceptable addition to a well-diversified dividend portfolio.

1 The market, of course, is notoriously fickle. It’s governed by the whims of algorithms, the pronouncements of self-proclaimed experts, and the occasional rogue tweet. It’s best not to question it too closely.

2 The demand for everything digital is, frankly, a bit alarming. It suggests a collective desire to escape reality, which is understandable, but ultimately unsustainable.

3 One can only dream. Perhaps the machines will eventually realise that true wealth lies not in accumulating data, but in distributing dividends.

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2026-03-18 14:22