The S&P 500 Index Could Jump by This Much in 2026: 1 Top Stock to Buy Before That Happens

• S&P 500 constituent Broadcom delivered respectable gains to investors successful 2025, and its accelerating AI concern is expected to pave the mode for further upside adjacent year.

• Broadcom is sitting connected a coagulated gross backlog, which could get bigger, acknowledgment to its caller AI deals.

• 10 stocks we similar amended than Broadcom ›

The S&P 500 scale generated steadfast gains of 17% successful 2025, arsenic of this writing, reaching a level of astir 6,850. The bully quality is that the scale is expected to prolong its momentum successful 2026.

According to HSBC, the S&P 500 scale could scope 7,500 by adjacent December. That points toward a imaginable leap of 10% from the index's existent reading.

The concern bank notes that robust spending on artificial quality (AI) infrastructure is expected to beryllium a cardinal catalyst for the scale successful 2026. That's wherefore present would beryllium a bully clip to instrumentality a adjacent look astatine 1 S&P 500 constituent -- Broadcom (NASDAQ: AVGO) -- which has delivered steadfast gains successful 2025 and seems acceptable to alert higher adjacent year, arsenic well.

Broadcom is 1 of the astir important players successful the AI spot marketplace and the sixth-largest constituent of the S&P 500 scale by weight. The institution makes application-specific integrated circuits (ASICs) and networking chips, specified arsenic switches and routers. Its products person been successful large demand, acknowledgment to the AI boom, arsenic they alteration information halfway operators to trim the outgo of moving AI workloads.

Broadcom's AI accelerators, known arsenic XPUs, integrate ASICs, high-bandwidth representation (HBM), and connectivity chips to present higher powerfulness ratio and compute performance. As ASICs are designed to execute circumstantial tasks, they tin outperform graphics processing units (GPUs) successful compute show and powerfulness ratio portion performing the tasks they're designed for.

This explains wherefore Broadcom has been making large waves successful the AI spot market. It designs customized AI accelerators for companies specified arsenic Alphabet, Meta Platforms, and ByteDance. What's more, it precocious added a caller lawsuit successful the signifier of OpenAI, which volition beryllium deploying 10 gigawatts (GW) worthy of Broadcom's AI accelerators done 2029.

The OpenAI woody unsocial has the imaginable to adhd betwixt $70 cardinal to $90 cardinal successful gross for Broadcom during its tenure, according to JPMorgan expert Harlan Sur. That's a large woody for a institution with $60 cardinal successful gross successful the trailing 12 months.

It's casual to spot wherefore the JPMorgan expert has specified a sunny forecast. A 1 GW information halfway costs astir $10 cardinal to build, with 60% of that wealth going toward hardware components specified arsenic chips. Broadcom, therefore, is astir apt sitting connected a monolithic opportunity, acknowledgment to OpenAI.