From Redherring.com...
redherring.com
>>>Broadcom
The silicon behind broadband Net access.
By David Lipschultz
From the December 18, 2000 issue
Just about every tech company, from content providers to infrastructure builders, is placing huge bets on broadband. And no company is better positioned to profit from the transition to broadband than Broadcom (Nasdaq: BRCM), which owns 80 percent of the market for the chips that go into DSL and cable modems.
It doesn't matter what type of technology ultimately dominates the broadband-access market. Broadcom also owns a chunk of the satellite and terrestrial digital broadcast market, and is continuing to diversify. "They are the mutual fund of the broadband semiconductor industry," says Douglas MacKay, manager of Red Oak Technology Select (Nasdaq: ROGSX), which ranks in the top 1 percent of the category for the 12 months through September.
As interest in broadband has grown, so have Broadcom's sales. It had $37 million in revenue in 1997, it should break $1 billion this year, and analysts expect 50 percent annual growth for the next five years. And with several promising acquisitions that expand it into the markets for local- and wide-area network, short-range wireless, and optical communications, the company could exceed even those numbers.
Consider its $1.3 billion buyout of the privately held optical-chip maker NewPort Communications, which got Broadcom not only NewPort's cutting-edge chips but also a roster of top-tier clients that includes Cisco Systems (Nasdaq: CSCO) and Lucent Technologies (NYSE: LU).
Predictably, investors have driven up the stock. But it's still a great core holding. Keep your eye out for a dip, and then tuck it away.<<< |
