1. The Scene
In 2018, Broadcom announced its acquisition of CA Technologies.
The market hated it. The stock fell sharply.
In that moment I leaned in while most leaned out.
2. The Misunderstanding
Investors saw a semiconductor company buying enterprise software and called it a mistake.
To them, CA was legacy — low growth, uninspiring.
Looked at another way, it was recurring revenue sold to the same customers, with real pricing power and durable cash flow.
This wasn’t style drift. It was discipline — applied to a broader canvas.
3. The Edge
The numbers began to tell a different story.
Even without synergies, the deal was highly accretive.
It made no sense that Broadcom was worth less after acquiring more resilient cash flow.
Hock Tan wasn’t buying growth. He was buying resilience — then applying his operating model to maximize profitability and return on capital.
Hock didn’t just buy businesses — he wove them together. Symantec, VMware, and now AI infrastructure became complementary pieces, scaled through the same customers, with pricing power and operating leverage compounding the outcome.
That same conviction now guides our positions in Astera Labs and a select group of category leaders — companies compounding quietly at the foundations of AI infrastructure.
4. The Lesson
Most investors wait for proof.
But real inflection points often look broken in the moment.
Patience, conviction, and the willingness to act against the crowd matter most.
Discipline isn’t loud — but it compounds.
5. The Outcome
Seven years later, that thesis has compounded far beyond what most expected. I still hold it — because the thesis hasn’t changed. It has only strengthened. Broadcom continues to allocate with precision, compound cash flows, and expand its advantage — now powering the next wave of AI with custom silicon, while staying true to the same discipline that made it dominant in networking and enterprise software.
6. The Close
The best opportunities don’t announce themselves.
Noise is easy to follow.
Clarity takes patience.
Truth takes time.
— Rafael
Founder, X Point
