Shares of Broadcom (NASDAQ: AVGO) have been an incredible investment over the last decade, handily beating both the market overall and the high-growth semiconductor industry. Total return (which includes dividends paid) sits at over 1,900%. The company has of course ridden the expansion of smartphones and cloud computing. But it also made a string of acquisitions that have turned the formerly Singapore-based (now San Jose, Calif.-based) chip designer into a giant in the tech world.  

Broadcom recently wrapped up its 2022 fiscal year (ended Oct. 30) on a high note but declined to provide full-year 2023 guidance. Its mega-merger with cloud software company VMware (NYSE: VMW) is also being carefully scrutinized. How long can Broadcom's sizzling growth last?

The most important economic backdrop headed into Broadcom's fiscal fourth-quarter report was the ongoing downturn in the semiconductor space. Most notably, companies like Qualcomm have been reporting weakening sales as people pause on new smartphone purchases. Micron Technology is also hurting from the smartphone corner of the chip arena, as well as a slowdown in PC demand and from oversupply among some of its enterprise customers. And of course, chip stock darlings Nvidia and AMD are also working with retail partners to sell off excess inventory of their consumer-facing chips.

Continue reading

Source Fool.com