Keysight’s (KEYS, Financial) revenue and earnings growth surged as a combination of easy comparisons and pent-up demand converged with excellent execution in the face of widespread competitive supply chain disruptions. Keysight primarily serves research and development labs across most industries, providing hardware and, increasingly, software content that enables bleeding-edge product testing. Many of the technologies that Keysight helps enable will not come to market for several years, so Keysight must develop many of its own custom parts, especially microprocessors. The Company's captive fabrication plant has helped it avoid many of the shortfalls seen at companies that rely on more off-the-shelf silicon. As customer R&D budgets move inexorably higher, we expect the Company to grow its share of wallet and drive attractive growth for the next several years.
From David Rolfe (Trades, Portfolio)'s Wedgewood Partners third-quarter 2021 shareholder letter.
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