Broadcom (Nasdaq: BRCM) upped its revenue guidance for the fourth quarter yesterday. And the share price fell right away.

Locking the previous revenue guidance down to the upper end of the forecasted range would seem like a unanimously positive event, but that positive news went hand in hand with tighter gross margins. In some sense, Broadcom is trading in some profits in return for higher sales.

But it's not as crass as it might sound on the surface. The company is not chasing sales with big discounts, as this trade-off often implies. Instead, the culprit is higher warranty-related costs than expected. In other news, the share count is going up a bit due to options exercises, which is never a good thing for existing shareholders.

These slight setbacks look like a good excuse to take some profits out of Broadcom today. After all, the stock has delivered a market-crushing 45% return over the past year, leaving main rivals Texas Instruments (NYSE: TXN) and Qualcomm (Nasdaq: QCOMM) eating its dust. Broadcom is a focused play on smartphone growth as the company provides several vital components in high-end phones. Samsung and Motorola (NYSE: MOT) are among the company's biggest customers, but with its five largest customers last year contributing just 35% of total sales, Broadcom is not beholden to any particular handset designer but plays the entire field.

The stock is currently priced right in line with growth expectations. Are you buying on today's dip or waiting for a larger discount down the road? Would you rather buy Qualcomm these days? Share your Broadcom strategy in the comments below.

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