While reaping the benefits of past growth initiatives, focused on strategic acquisitions, Broadcom is well-positioned to achieve its current goals, leveraging the positive cash flow that grew 35% to about $3 billion in the first quarter. The company closed a number of acquisitions in recent years, including the high-value buyouts of Symantec and CA Technologies. Had regulators granted approval, fellow chipmaker Qualcomm (QCOM) would have become a part of Broadcom by now.
Broadcom’s continuing association with top customers like Apple and its fabless business model, which reduces production cost significantly, add to the growth prospects. Also, the growing market share in the wireless and broadband communication industries should help the company tap unfolding opportunities in the 5G realm.
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Broadcom. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.