Analyst Note| Abhinav Davuluri, CFA |
Broadcom reported solid third-quarter results consistent with our expectations. The firm’s results were buoyed by healthy networking demand led by cloud data center spending and sharp wireless growth. Broadcom’s product portfolio is well tailored to address the work-from-home environment and we expect continued double-digit top-line growth next quarter, especially as enterprises resume infrastructure technology spending consistent with the COVID-19 recovery. We remain positive on Broadcom’s networking, storage, and broadband business units, and we applaud the firm’s integration efforts of its software acquisitions such as Symantec and CA Technologies. That said, we are maintaining our $400 fair value estimate as we anticipate the recent stretch of double-digit growth to ultimately revert to management’s long-term revenue growth outlook in the mid-single digits in the coming quarters.