It has been a good few days for Broadcom as there have been some positive developments at the company. First, the company reported strong Q22020 earnings. Revenue rose 4% Y-o-Y in spite of the pandemic-driven downturn. Free cash flow rose to a record high of $3.1 billion, a growth of 21%.
CEO Hock Tan has estimated that the demand for broadband, AI interface chips, networking equipment, and storage gear is expected to grow by double digits in Q32020. Tan said, “Bottom line, in Q3, we really have much more demand than we can supply, and this may very well continue beyond Q3.”
The pandemic has proven to be a strong tailwind for digital technologies like cloud and storage. Companies involved in those segments have seen a demand surge, which in the case of Broadcom, has left companies facing a difficult time in keeping up.
The second piece of good news is Nokia’s recent decision to add Broadcom as a 5G chip vendor. The Finnish company had initially signed similar deals with Intel and Marvell. However, Intel had some issues and, as a result, Nokia’s products could not reach the market in time. Therefore, Nokia decided to diversify its supply chain and Broadcom benefited from the development.
Other Broadcom news include significant insider share selling. First, Chief Financial Officer Thomas Krause sold 39,000 shares worth $12.6 million on 9th June 2020. Then, Chief Legal Officer Mark David Brazeal sold 3,000 shares worth $0.9 million on 16th June 2020.
Broadcom Inc was formed when Avago Technologies acquired Broadcom Corporation back in 2016. Broadcom stock closed at $302.77 on 22nd June 2020, up 9.44% for the month.