Growth stocks have soared over the past two years, pushing the S&P 500 to record highs — and this is thanks to a couple of things. First, investors are betting that technologies such as artificial intelligence (AI) and quantum computing will revolutionize how businesses operate, so they’ve piled into stocks present in these areas, growth stocks like Nvidia and Alphabet, just to name two examples. Second, investors are optimistic that a lower interest rate environment may support companies focused on growth and, therefore, have piled into these players.

This momentum may continue for quite a while as the AI and quantum stories are in their early days and interest rates have just begun to decrease. This means now is a great time to add growth stocks to your portfolio because they may still have plenty of room to run. It’s also important to remember that even if the market environment shifts and growth stocks stumble, quality players are still likely to boost your portfolio significantly over the long run.

With this in mind, let’s check out the smartest growth stock to buy with $1,000 (or even less) right now.

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A market that may top $1 trillion

You probably won’t be surprised when I tell you this company is present in the area of AI. After all, this industry represents significant opportunity in the years to come. Analysts predict that the AI market will reach into the trillions of dollars by the start of the next decade, up from about $300 billion today.

This particular company plays a key role, has carved out an important niche, and recently announced impressive wins. I’m talking about networking giant Broadcom (AVGO -1.24%). This is the tech giant behind thousands of products found in smartphones, home connectivity devices, data center servers, and more.

Today, though, the business that’s driving enormous growth at Broadcom is AI. Broadcom offers customers products they need to connect and drive communications among compute nodes in data centers — and it’s seen demand for its Tomahawk switches and Jericho routers soar. Broadcom recently launched the Jericho4 router, a tool that connects more than 1 million of the company’s AI chips across data centers.

Carving out a niche

This brings me to the subject of chips, and this is where I say Broadcom has carved out a niche with its extended processing units (XPUs). These AI chips don’t necessarily compete directly with those of market leader, Nvidia, and here’s why.

While Nvidia’s chips are general-purpose, providing incredible power for a broad range of tasks, Broadcom’s XPUs are custom accelerators, designed for specific tasks. This is fantastic because it means Broadcom can offer customers something different and excel in this area — and recent earnings reports and contracts have shown it’s on the right path.

A few days ago, OpenAI announced it would deploy 10 gigawatts of Broadcom’s XPUs from the second half of next year through 2029. (A gigawatt is the equivalent of 100 million LED bulbs, says the U.S. Department of Energy.)

This is a big deal because OpenAI, the research lab that created ChatGPT, is a key player in the development of AI and is working with the biggest players in the field, from Nvidia to Advanced Micro Devices. In its latest earnings call, Broadcom also spoke of a new $10 billion order for its XPUs (the company didn’t reveal the customer’s identity).

AI revenue climbs 63%

And speaking of earnings, Broadcom has already seen tremendous growth from its AI business, with AI revenue increasing 63% to more than $5 billion in the last quarter. It expects the business to bring in more than $6 billion in the current quarter, which will represent 11 straight quarters of growth.

All this, along with Nvidia’s forecast for AI infrastructure spending to reach as much as $4 trillion by 2030, bodes well for this growth company in the years to come. Today, Broadcom stock doesn’t look cheap at 51 times forward earnings estimates. However, it’s important to remember that Broadcom is still in the early days of its AI story, and this valuation doesn’t take into account earnings beyond next year.

Broadcom has just begun showing its AI strengths and has plenty of room to run when it comes to winning customers and generating revenue growth. That’s why today, it’s the smartest growth stock to buy with $1,000 and hold on to as this AI story plays out.