NEW YORK (TheStreet) -- Sometimes, whether it is by accident or by proxy, finding good values on Wall Street today is something that should not be taken for granted, particularly considering how broadly expensive some equities have gotten.Very few sectors have demonstrated such valuation irrationality as the chip stocks, where names including Qualcomm ( QCOM) and ARM Holdings ( ARMH) continue to enjoy P/E ratios suggesting the sky's the limit while little is expected from traditional powers Intel ( INTC) and Atmel ( ATML). However, in the constant battle for chip supremacy one name that rarely ever gets mentioned is Broadcom ( BRCM). But I suspect that is all about to change after its strong second quarter. In a climate that has been rattled by some recent disappointments from two of Wall Street's darlings -- Apple ( AAPL) and Chipotle ( CMG) -- Broadcom, as it did in its first quarter, once again rose to the occasion by not only reporting exceptional numbers, but offering guidance that made me wonder if our macro concerns were not merely exaggerated and overblown. Leading into last month's conference call, I wasn't exactly sure of what to expect in light of Apple's weakened iPhone sales. This is important to consider because in addition to Samsung, Apple represents over 10% of Broadcom's revenue. However, in its most recent earnings report, Broadcom announced net income of $160 million, or 28 cents per share, on revenue of $1.97 billion. The company's sales total for the quarter represents a sequential increase of almost 8% and an annual increase of almost 10%. While some may argue it was a small beat, in this environment anyone will take it -- even Apple. What also stood out was Broadcom's operating income, which declined slightly from the previous year but on a sequential basis it showed a considerable improvement from its first quarter. Its better-than-expected numbers were attributable to increased demand for its set-top box chips, which the company said continues to grow as more consumers outside of the U.S. and Europe subscribe to digital television services. For that matter, this is one of the key differentiators of the company from others within the sector -- it has a highly well-diversified product/service portfolio.
In terms of guidance, third-quarter revenue is expected to arrive between $2 billion and $2.15 billion. On average, analysts are forecasting revenue of $2.11 billion. So with Apple's highly anticipated iPhone 5 launch, I think Broadcom should easily exceed these figures. As the battle for chip supremacy continues the question is, where does Broadcom rank among its rivals? That's an important question when considering the fierceness of the competition. But the company has always been one that has shown it can stand out from its peers. Unlike its rivals, Broadcom also generates revenue from another popular and highly profitable stream -- routing and switching equipment, one where it competes with (among others) Cisco ( CSCO), Dell ( DELL) and Hewlett-Packard ( HPQ). So as great as the outlook appears for the rest of the year when discussing Broadcom's growth potential in smartphones and devices, one has to also factor in its networking gear.