It hasn’t been that long since
my last update on Broadcom (
NASDAQ:AVGO),
but the shares have continued to outperform (up 8% versus a slight
decline in the SOX) on the company’s strong leverage/exposure to a
red-hot enterprise/networking segment and ongoing excellence
in execution on margins. Moreover, with lead-times still near record
levels and not as much inventory-building in markets like networking and
broadband, Broadcom is better-protected from some of the cyclical
sentiment risk that has hit chip stocks. I
continue to like Broadcom today. Taking another look at the key data
center market, I believe this market can continue to drive strong
revenue growth for Broadcom for several more years, helping offset some
of the risk in markets like wireless. With longer-term revenue growth
potential above 6%, along with further margin leverage, these shares
look undervalued below the $700’s.
Read the full article at Seeking Alpha:
A Multiyear Enterprise Investment Cycle Continuing To Drive Opportunities For Broadcom
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