Broadcom (AVGO) closed at $344.33 on October 15 after returning -13.59% over six months, even though revenue in the latest quarter rose 85.5% and earnings grew 216.1% year over year. Most of that growth comes from custom chips designed for large technology companies, which are sticky because customers cannot switch suppliers without restarting engineering, while infrastructure software is a smaller business acquired through deals. Per CNN, analysts' median target sits 52.47% above the current price, while the stock is down 1.43% over twelve months. The article flags concentration risk, since the custom chip business depends on a few very large customers able to bring the work in-house, and notes a trailing P/E of 46.50x.
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