Seeking Alpha: Cavium Still Trying To Prove It Is More Than A Niche Specialist

Analysts and investors seem to be of two minds when it comes to companies with specialized or "niche" products. On one hand, these companies often have good market shares and strong margins, but at the cost of a smaller addressable market and the risk of competition from larger, generalist rivals. When it comes to Cavium (CAVM), there is still active debate as to whether the company's efforts to enlarge and expand beyond its specialized multi-core network processor market will pan out.

I guess I would call myself a cautious bull on Cavium. There is a large pool of potential revenue out there if Cavium can succeed in lower core-count markets and if new efforts like Neuron, Fusion, and Project Thunder gain share. It is not going to be easy, though, as few companies achieve long-term revenue growth in excess of 20% and Cavium will have to do so in the face of competition from Intel (INTC), Freescale (FSL), Broadcom (BRCM) and Qualcomm (QCOM). This is by no means a widows-and-orphans stock, but for readers looking for high-fliers, this is a name worth further due diligence.

Read more here:
Cavium Still Trying To Prove It Is More Than A Niche Specialist