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Broadcom (AVGO) Expands Network With Thor Ethernet Solutions

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Broadcom Limited (AVGO - Free Report) recently announced its latest 200G Ethernet controller, known as Thor. It is specifically designed for machine learning, networking, fast-developing Internet of Things (IoT) and data analytics. Broadcom’s Thor is expected to boost network performance and improve server efficiency.

Thor features 50G PAM-4 and PCIe 4.0 and is built on NetXtreme E-Series architecture. The combination of high-bandwidth Ethernet controller and highly enhanced hardware acceleration engines caters to high bandwidth memory interface required for next generation training in deep learning, high performance computing (HPC) and routing applications.

We believe this will aid Broadcom’s top-line growth going forward. With this initiative, Broadcom is attempting to establish itself as the ideal vendor for Ethernet controller and developers in the IoT and data center market. The sales model’s scalability and breadth will enable developers to access Broadcom’s expanding portfolio of mass market products.

According to Seamus Crehan, president of Crehan Research, “Broadcom’s early market sampling of its Thor™ 200Gbps Ethernet controller will help customers meet the much higher server and storage bandwidth demands required by the next phase of data center applications and architectures.”

Per the press release Thor shipments are expected to reach 1 million in the early 2019 and grow to around 10 million ports by 2022.

Broadcom Limited Price and Consensus


Broadcom Limited Price and Consensus | Broadcom Limited Quote

Growth Factors

Broadcom’s expanding product portfolio makes it well poised to address the needs of rapidly growing technologies like Internet of Things (IoT) and 5G.

We believe that the company’s vast product portfolio, which serves multiple applications within four primary end markets (Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other), will positively impact the to-be-reported quarter’s results.

Moving forward, Broadcom recently entered into a definitive agreement to acquire CA, Inc. for $18.9 billion in cash. The chipmaker intends to enhance its long-term margins with the buyout of CA, a leading IT management software provider.

Broadcom’s move of shifting headquarters to San Jose, CA from Singapore will aid it to pursue the acquisition of Islandia, NY-based CA. This relocation is anticipated to ease the regulatory environment for Broadcom. Moreover, the company can reap the benefits of cost reduction as well as lessened competition.

Zacks Rank & Other Stocks to Consider

Broadcom has aZacks Rank #2 (Buy).

NetApp, Inc. (NTAP - Free Report) and Inc. (CRM - Free Report) are other stocks worth considering in the broader technology sector. Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NetApp and Salesforce have a long-term EPS growth rate of 14.1% and 25%, respectively.

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