Broadcom Corp.’s decade-long run as Orange County’s largest technology company by market value has come to an end at the hand of another Irvine-based business.
Steady gains for shares of Western Digital Corp. over the past year, including a nearly 15% rise in the disk drive maker’s stock in the past month, recently pushed that company’s market value past chipmaker Broadcom—with more than a billion dollars to spare.
Western Digital had a market value of about $16.8 billion as of late last week, while Broadcom was valued at about $15.3 billion.
It’s the first time Broadcom hasn’t been OC’s largest public technology company—or one of OC’s two largest public companies—since its stock slumped in the wake of 2001’s crash of the technology sector.
Since recovering from that downturn—its valuation fell below $3 billion in 2002—Broadcom has had few peers in terms of market size. For much of the past decade, it has battled Irvine-based drug maker Allergan Inc. for the No. 1 spot among all OC-based public companies.
Allergan, the maker of Botox and other drugs, is now valued at about $27.6 billion and is the county’s largest public company by a wide margin (see related story, page 1).
Broadcom still had a nearly $8 billion lead over Western Digital in terms of market value as recently as April, but the two companies’ stocks have since followed divergent paths.
Shares of Western Digital are up about 40% since April and nearly double what they were at this point last year. The company’s stock now trades near its all-time high.
Broadcom, meanwhile, has seen its stock steadily erode since April, when its market value was approaching $20 billion.
The flip in rankings for the two tech companies came in late October following quarterly earnings for both companies. Broadcom’s results and guidance for the current quarter were seen as troubling, while Western Digital’s results surpassed Wall Street expectations.
Broadcom’s earnings included revenue targets for the current quarter—about $1.98 billion, down 4.8% year-over-year—below Wall Street expectations. It also announced a restructuring plan that will cut as many as 1,150 jobs, or about 9% of its global workforce, primarily in regions outside OC.
Broadcom employs about 2,500 people in OC. Shares for the chipmaker fell more than 8% on the announcement, with concerns that the company is losing market share in the smartphone market.
Western Digital, meanwhile, posted quarterly sales of $3.8 billion and adjusted profits of $514 million. Both figures exceeded analyst expectations.
The company, now the world’s largest hard disk drive maker following last year’s $4.3 billion buy of San Jose-based competitor Hitachi Global Storage Technologies Ltd., said it sold 62.6 million hard drive units in the quarter, compared to 62.5 million units shipped a year ago.
The company, which moved its headquarters from Lake Forest to Irvine in 2010, employs nearly 1,600 people in the county.
How long Western Digital stays on top remains to be seen. Shares of chipmakers in general—and Broadcom in particular—tend to see plenty of fluctuations.
In late 2000, the chipmaker was valued at $60 billion, the highest market capitalization ever seen for an OC company.
Broadcom isn’t the only large local public company to have seen a stock drop this year.
Allergan’s shares are down 20% from its 2013 high earlier this year, while shares of Irvine-based heart valve maker Edwards Lifesciences Corp., which is OC’s fourth-largest public company with a market value of about $7.3 billion, are off about 25% from a 52-week high.
