We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Broadcom Ships World's First 16 nm Knowledge-Based Chips
Read MoreHide Full Article
Shares of Broadcom Limited (AVGO - Free Report) have underperformed the broader Zacks Electronics- Semiconductors industry on a year-to-date basis. While the industry generated a return of 49.7%, the stock returned 22.9%.
The underperformance of the stock could be attributed to a highly competitive environment, along with aggressive price wars, which persistently force the company to reduce prices or increase marketing expenditures. Average selling prices of established products also tend to erode in the semiconductor industry, and Broadcom has to continuously invest in R&D, in order to introduce value-added products that provide a hedge against competition. These, in turn, limit its profitability to a certain extent.
However, Broadcom is expected to enjoy synergistic benefits from the merger with Avago, which will boost its profitability. In addition, the company maintains an efficient global supply chain with a variable, low-cost operating model, enabling it to maintain sustainable revenue growth and expand margins. Meanwhile, the company has recently flagged off the shipments of BCM15000 (BCM15K) – its latest line of 16 nm heterogeneous knowledge-based processors (KBPs) – that have been designed keeping in mind the modern network infrastructure, including core, edge, switches and routers, for the data centers.
What is Special About BCM15K?
The new line of BCM15K 16nm KBPs are capable of integrating SRAM, TCAM and algorithmic search technology, in order to deliver the highest throughput and performance, capable of handling hyperscale data center applications, network security appliances. These are optimized for the next generation of service provider networks.
The BCM15K KBPs can deliver internet search speeds of up to 7.2 billion searches per second. These are capable of transferring data at a whopping speed of 1 terabit per second, which is an impressive improvement over the older KBPs.
What Does This Mean for Broadcom?
Given the fast proliferation of bandwidth-intense applications, like video streaming and cloud computing, global internet traffic is estimated to shoot through the roof in the coming years. As per a Cisco (CSCO - Free Report) report, by the end of this year, global IP traffic is anticipated to cross the threshold level of 1 zettabyte. Moreover, by 2020, a phenomenal 2.3 zettabytes of IP traffic is estimated to become the standard.
Hence, the requirement for advanced routers and switches having high performance KBPs, capable of handling such huge amounts of data, is likely to witness strong demand, going ahead.
We note that the 16 nm KBPs are the world’s first to provide Broadcom an advantage over its peers and augur well for the company over the long run.
Notably, the consensus estimates for Applied Optoelectronics’ current year improved to 81 cents from 51 cents, over the last 30 days.
Similarly, the consensus estimates for Cirrus’ current year improved to $3.73 from $2.89, over the last 30 days.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Broadcom Ships World's First 16 nm Knowledge-Based Chips
Shares of Broadcom Limited (AVGO - Free Report) have underperformed the broader Zacks Electronics- Semiconductors industry on a year-to-date basis. While the industry generated a return of 49.7%, the stock returned 22.9%.
The underperformance of the stock could be attributed to a highly competitive environment, along with aggressive price wars, which persistently force the company to reduce prices or increase marketing expenditures. Average selling prices of established products also tend to erode in the semiconductor industry, and Broadcom has to continuously invest in R&D, in order to introduce value-added products that provide a hedge against competition. These, in turn, limit its profitability to a certain extent.
However, Broadcom is expected to enjoy synergistic benefits from the merger with Avago, which will boost its profitability. In addition, the company maintains an efficient global supply chain with a variable, low-cost operating model, enabling it to maintain sustainable revenue growth and expand margins. Meanwhile, the company has recently flagged off the shipments of BCM15000 (BCM15K) – its latest line of 16 nm heterogeneous knowledge-based processors (KBPs) – that have been designed keeping in mind the modern network infrastructure, including core, edge, switches and routers, for the data centers.
What is Special About BCM15K?
The new line of BCM15K 16nm KBPs are capable of integrating SRAM, TCAM and algorithmic search technology, in order to deliver the highest throughput and performance, capable of handling hyperscale data center applications, network security appliances. These are optimized for the next generation of service provider networks.
The BCM15K KBPs can deliver internet search speeds of up to 7.2 billion searches per second. These are capable of transferring data at a whopping speed of 1 terabit per second, which is an impressive improvement over the older KBPs.
What Does This Mean for Broadcom?
Given the fast proliferation of bandwidth-intense applications, like video streaming and cloud computing, global internet traffic is estimated to shoot through the roof in the coming years. As per a Cisco (CSCO - Free Report) report, by the end of this year, global IP traffic is anticipated to cross the threshold level of 1 zettabyte. Moreover, by 2020, a phenomenal 2.3 zettabytes of IP traffic is estimated to become the standard.
Hence, the requirement for advanced routers and switches having high performance KBPs, capable of handling such huge amounts of data, is likely to witness strong demand, going ahead.
We note that the 16 nm KBPs are the world’s first to provide Broadcom an advantage over its peers and augur well for the company over the long run.
BROADCOM LTD Price
BROADCOM LTD Price | BROADCOM LTD Quote
Zacks Rank and Key Picks
At present, Broadcom carries a Zacks Rank #2 (Buy).
Other favorably placed stocks in the broader technology space are Applied Optoelectronics, Inc. (AAOI - Free Report) and Cirrus Logic, Inc. (CRUS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the consensus estimates for Applied Optoelectronics’ current year improved to 81 cents from 51 cents, over the last 30 days.
Similarly, the consensus estimates for Cirrus’ current year improved to $3.73 from $2.89, over the last 30 days.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>