Broadcom Ltd (NASDAQ:AVGO) has roots that go back to the 1960s. It was the first company to launch light emitting diode (LED) dot matrix displays, which you know as the modern computer screen.
Since then, AVGO has been at the heart of a number of firsts in the computer and telecommunications revolutions that have taken place in the ensuing 50 years.
This also means that AVGO has found a way to survive every wave of technology in the industry and has learned to pivot and find ways not only to survive but remain at the top of the industry.
Currently, AVGO is a leader in cloud computing, telecommunications including mobile devices, Big Data and other next-generation tech like whole-room wireless charging and heads-up displays. It’s not making motherboards for the last PCs on Earth.
And AVGO, like most of the chip makers, has had quite a nice run this year so far. It’s a $100 billion company (by market capitalization) that’s up 44% year to date. That’s a big ship moving at quite a clip.
But that is precisely why it recent FYQ3 earnings announcement was so curious. AVGO beat on every metric. What’s more, it actually provided bullish guidance moving forward.
This is why it was so odd that after this release, AVGO stock dropped 4% in after hours trading and is currently down 3.9% in mid-day trading Friday.
The one possibility is, some Street people are getting scared about Apple Inc. (NASDAQ:AAPL) and its iPhone 8 release. You see, 20% of AVGO revenue is from AAPL products. Part of the premium it has been carrying is because AAPL was hyping its new phone for the first half of the year and production was up.
Now, the Street is getting scared about the timing and pricing on the new iPhones. If they don’t sell like expected, AVGO won’t be so busy.
AAPL is to consumer tech like Amazon.com, Inc. (NASDAQ:AMZN) is to consumer retail. The tiniest thing they do reverberates across the industry — whether justified or not.
There’s no doubt that AVGO stock is flying high right now, but it is still beating expectations and saying it’s on track to keep up the pace. Any sell off at this point is a reason to buy for long-term tech investors.
This is a blue-chip company that doesn’t get the press that higher profile clients (AAPL for example) and competitors get. But that doesn’t mean it isn’t doing some seriously heavy lifting in some of the most dynamic sectors in the tech sector today.
But that doesn’t mean it isn’t doing some seriously heavy lifting in some of the most dynamic sectors in the tech sector today.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
