Broadcom (NASDAQ: AVGO) stock surged 4.7% through 11:15 a.m. ET Monday after Bernstein analyst Stacy A. Rasgon published a bullish note on the artificial intelligence industry in general, and on Broadcom, and also Nvidia (NASDAQ: NVDA), in particular.

The analyst says Bernstein owns both stocks itself, and rates both Broadcom and Nvidia "outperform."

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Since hitting highs late last year, artificial intelligence stocks have been in a bit of a funk. Broadcom itself topped $413 per share on Dec. 10, but is down 22% since, as investors worry that the AI hype might have gotten overblown.

Rasgon, however, has no such worries. "AI demand currently shows no signs of slowing," says the analyst, and this is creating powerful profits for Broadcom. Last quarter, sales increased 16%, while profits rose 173%.

Rasgon calls the valuation on Broadcom "absurdly attractive" -- at least, assuming the AI trend has legs. Looking ahead to 2027, the analyst forecasts per-share profit of $20 or more for the semiconductor giant. And admittedly, this is only a forward earnings estimate, but if he's right, then at $324 per share today, the stock is selling for only 16 times those forward earnings (or less).

Now consider that Broadcom only earned $5.12 per share over the past year, and what does this mean? It means roughly 400% earnings growth over the next two years. 100% growth this year. Another 100% growth next year.

Even valued on trailing earnings, Broadcom stock costs only 60 times earnings. If it can maintain 100% earnings growth for even just two years, though, then, yes, I'd have to agree that even 60x earnings sounds absurdly cheap.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

Why Broadcom Stock Popped Today was originally published by The Motley Fool