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Broadcom Inc AVGO

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Broadcom Maintains Wireless and Networking Growth in Q3; No Change to $400 FVE

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Broadcom reported solid third-quarter results consistent with our expectations. The firm’s results were buoyed by healthy networking demand led by cloud data center spending and sharp wireless growth. Broadcom’s product portfolio is well tailored to address the work-from-home environment and we expect continued double-digit top-line growth next quarter, especially as enterprises resume infrastructure technology spending consistent with the COVID-19 recovery. We remain positive on Broadcom’s networking, storage, and broadband business units, and we applaud the firm’s integration efforts of its software acquisitions such as Symantec and CA Technologies. That said, we are maintaining our $400 fair value estimate as we anticipate the recent stretch of double-digit growth to ultimately revert to management’s long-term revenue growth outlook in the mid-single digits in the coming quarters.

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Company Profile

Business Description

Broadcom--the combined entity of Broadcom and Avago--boasts a highly diverse product portfolio across an array of end markets. Avago focused primarily on radio frequency filters and amplifiers used in high-end smartphones, such as the Apple iPhone and Samsung Galaxy devices, in addition to an assortment of solutions for wired infrastructure, enterprise storage, and industrial end markets. Legacy Broadcom targeted networking semiconductors, such as switch and physical layer chips, broadband products (such as television set-top box processors), and connectivity chips that handle standards such as Wi-Fi and Bluetooth. The company has acquired Brocade, CA Technologies, and Symantec's enterprise security business to bolster its offerings in infrastructure software.

1320 Ridder Park Drive
San Jose, CA, 95131-2313
T +1 408 433-8000
Sector Technology
Industry Semiconductors
Most Recent Earnings Jul 31, 2021
Fiscal Year End Nov 1, 2021
Stock Type Cyclical
Employees 21,000