Morningstar Rating

Stock Research and Analysis

by Brian Colello, CPA

Bulls Say

Broadcom is the market share leader in providing chips for technologies such as enterprise networking, set-top boxes, and mobile connectivity functions.
Broadcom has demonstrated proficiency for integrating various functions onto a single chip, which ultimately enables the development of advanced devices like smartphones and tablets.
Broadcom has an extensive R&D staff, as the majority of its employees work in R&D. This impressive human capital should help the firm develop and integrate new technologies. Read more 

Bears Say

Broadcom tried and failed to build a sustainable wireless baseband business, and it remains to be seen whether the lack of a robust baseband offering will weigh on future wireless connectivity chip sales.
Qualcomm is a significant wireless competitor that is making inroads into connectivity chips, a segment in which Broadcom has been market leader for quite some time.
Broadcom has relatively high customer concentration in wireless connectivity products, and design losses in products like Apple’s iPhones or iPads could be damaging blows to the company. Read more 

Management

We like Broadcom’s moves to take more shareholder-friendly initiatives, and despite a failed effort to build a wireless baseband business from the ground up, we view the team as good stewards of shareholder capital. Scott McGregor, CEO, joined Broadcom   Read more 

Profile

Broadcom designs and markets a wide portfolio of digital semiconductors. Incorporated in 1991, the company is primarily focused on three end markets: networking; broadband;   Read more 

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