Short of repudiating the CA (CA) acquisition and announcing a huge buyback, there’s really not much Broadcom (AVGO)
could have done with its fiscal third quarter results that would
restore enthusiasm for the shares back to its pre-deal announcement
levels. And frankly, I’m not sure that would have done it either, as the
shares had been trending down since late November anyway.
There
are still a lot of positives to the Broadcom story, including a very
strong market position in switch silicon, underrated (still)
capabilities in heavy-duty AI ASICs, and cash-generating businesses in
areas like networking ASICs and enterprise storage. Add in a possibly
improving Wireless business and an undemanding valuation, and I believe
Broadcom shares still have a lot of appeal. Set against that appeal are
the concerns about Broadcom going too far out of its area of expertise
with the CA deal and a wider slowdown in the chip space.
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Broadcom Beats, But Rebuilding Confidence Takes Time
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