AVGO Options Signal $350 Call Contention as AI Backlog Fuels Upside Potential – Here’s How to Play It

• Broadcom (AVGO) trades at $346.17, up 1.38% with RSI at 35.53—oversold but trapped in a long-term range.
• Options data shows heavy call open interest at $350 and $360, while puts dominate at $330 and $310, hinting at a tug-of-war near key levels.
• Q4 AI revenue surged 74% to $18B, with a $73B backlog—driving analyst optimism despite CEO Hock Tan’s $42M share sale.

The stock’s 1.38% intraday gain masks a fragile setup: technicals show a short-term bearish trend, but options data and AI-driven fundamentals scream for a breakout. Here’s the takeaway—AVGO is primed for a test of $350, with call buyers and institutional bets lining up for a potential surge. The risk? A breakdown below $338.54 could reignite selling pressure.

The $350 Call Wall and Put Defense: What Options Reveal

The options chain tells a story of cautious optimism. For this Friday’s expiry (Dec 26), the AVGO20251226C350 call has 12,447 open contracts—the most of any strike. That’s not just noise; it’s a price level where big money is betting on a rebound. Meanwhile, the AVGO20251226P330 put leads with 11,795 open contracts, acting like a safety net for bears. The put/call ratio for open interest is 0.975, nearly balanced, but the skew toward calls suggests a bias for a rebound above $350.

But don’t ignore the puts. Heavy put open interest at $310 and $330 means institutional players are hedging against a drop. If AVGO cracks $338.54 (the intraday low), those puts could trigger a cascade of selling. The key is whether bulls can push past $350 to validate the call buyers’ thesis.

News Flow: AI Backlog vs. CEO Sales – Which Wins?

Broadcom’s Q4 results are a rocket fuel moment: $18B in revenue, $8.5B net income, and a $73B AI backlog. Analysts are pricing in 150% AI revenue growth in 2026, and the VMware Cloud Foundation’s "Private AI" feature is already winning enterprise contracts. This isn’t just hype—it’s a $5B recurring revenue engine in the making.

Yet CEO Hock Tan’s $42M share sale raises eyebrows. Is it a confidence move ("I’m locking in gains") or a red flag? History shows insiders often sell during strong runs, but the broader trend—seven "Buy" ratings from Wall Street firms and 31.4M institutional shares added in Q3—suggests the sell-off is more noise than signal. The stock’s 52% gain over the past year isn’t a fluke; it’s a re-rating from cyclical chipmaker to AI infrastructure leader.

Trade Ideas: Calls for the Breakout, Stock for the Grind

For options traders, the AVGO20251226C350 call is the most compelling near-term play. With the stock at $346.17, this strike is just 1% out of the money. If AVGO closes above $350 by Dec 26, the call could jump 20-30% on leverage. For a longer-term bet, the AVGO20260102C360 (expiring Jan 2) offers cheaper premium and aligns with the $360 moving average resistance.

Stock buyers should target $339.93–$341.67, the 30D support zone. A close above $347.19 (the intraday high) would confirm a breakout. Set a stop-loss below $338.54 to protect against a breakdown. If the stock holds, aim for $350 as the first target, then $360–$370 for a full rally.

Volatility on the Horizon: Balancing AI Hype and Geopolitical Risks

The next two weeks will test AVGO’s resolve. A breakout above $350 could trigger a retest of the 30D MA at $365.37, while a breakdown below $338.54 might force a reevaluation of the $317.66 (lower Bollinger Band) support. Don’t forget the risks: U.S.-China tensions and regulatory scrutiny could disrupt Broadcom’s China revenue stream. But with $26.9B in free cash flow and a 67% EBITDA margin, the company has buffers.

Bottom line: AVGO is at a crossroads. The options data and AI-driven fundamentals lean bullish, but short-term volatility is inevitable. Play it smart—use the $350 call as a directional bet, and keep a close eye on that support zone. If the stock holds, the AI train isn’t slowing down anytime soon.