Broadcom Inc. AVGO

The business

Broadcom does two unrelated things well. It designs semiconductors: custom accelerators built to order for hyperscale cloud companies that want their own artificial-intelligence silicon rather than someone else's, plus the Ethernet switching chips that connect them, plus a long tail of broadband, wireless and storage parts. Separately it owns enterprise software, mostly VMware, sold to large companies on multi-year contracts at very high margins.

The second business exists to fund the first and to smooth the cycle. Hock Tan buys mature software franchises, raises prices, cuts costs, and collects the cash.