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.
Both consumer demand and technological innovation are pushing converged devices, such as the Apple iPhone. Broadcom has demonstrated proficiency for integrating various functions onto a single chip, which ultimately enables the development of these devices.
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 has made hefty investments in wireless baseband chips, but sales momentum into key customers like Samsung and Nokia has stalled, and it remains to be seen whether Broadcom can ever generate adequate returns from this business line.
Qualcomm is a significant wireless competitor that is making inroads into connectivity chips, a segment in which Broadcom has dominated in years past.
Broadcom has relatively high customer concentration in wireless products, and design losses in products like Apple’s iPhones or iPads could be damaging blows to the company. Read more 

Management

Some may consider Broadcom to have poor corporate stewardship, not because of the current management team, but because of the less-than-stellar reputation earned by its predecessors. We like the current management team's recent moves to take more shareholder-friendly   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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