AVGO Options Signal $355 Floor as Bulls Target $370 Rebound – Here’s How to Play the AI Backlog Play

• Broadcom (AVGO) plunges 11% on Dec 12, 2025, despite smashing Q4 revenue and AI growth forecasts.
• Options market shows heavy put open interest at $355 and call OI at $370, hinting at a battle for control between bears and bulls.
• CEO Hock Tan’s $73B AI backlog and 10% dividend hike clash with margin fears, creating a volatile setup for traders.

Here’s the thing: AVGO’s options market is screaming that traders are bracing for a sharp rebound—or a deeper breakdown. With the stock trading at $361.07 (down from $406.37), the put/call ratio for open interest is nearly balanced at 1.03, but the strike levels tell a different story. The key takeaway? This stock is sitting on a potential springboard—if it holds above $359.01, the intraday low. If it breaks below, the 200-day MA at $338.30 becomes a critical test.

The Options Imbalance: A Bullish Floor and Bearish Ceiling

Let’s start with the OTM options. For this Friday’s expiry (Dec 19), the top put open interest is clustered at $355 (OI: 7,470) and $350 (OI: 6,388). That’s not random—it’s a crowd of traders betting the stock won’t fall much lower. Meanwhile, the top call OI for next Friday is at $370 (OI: 12,646), suggesting a quiet but growing belief that AVGO could rebound to that level.

Think of it like a seesaw: the puts are the anchor trying to hold the stock up, while the calls are the counterweight aiming to push it higher. The danger? If the stock closes below $355, those puts could expire worthless, leaving the bears in charge. But if it holds above $359.01, the $370 call buyers might get their wish.

The News: AI Growth vs. Margin Realities

Broadcom’s Q4 results were a home run—$18B revenue, 74% AI semiconductor growth, and a $73B backlog. But here’s the catch: margins are shrinking. CFO Kirsten Spears warned of a 100-basis-point contraction due to AI infrastructure costs. That’s why the stock is down 10% today—investors love the long-term story but are spooked by short-term pain.

The options data lines up with this tension. The heavy put OI at $355 reflects hedging by longs worried about margin-driven selloffs. The call OI at $370 shows speculators betting the AI backlog will eventually outweigh near-term costs. The real question is whether the market will give the stock time to prove that theory.

Actionable Trade Ideas: Where to Play This Setup

For options traders, the most compelling plays are:

• Buy AVGO20251219P355 if the stock dips below $360. This put has 7,470 open interest and could act as a floor if the 200-day MA holds.
• Buy AVGO20251219C370 if AVGO rallies above $375. The $370 strike is a magnet for buyers expecting a rebound to test the 30-day MA at $370.23.

For stock traders, consider:

• Entry near $359.01 if the stock holds above its intraday low. Target $375 (the 30-day MA) as a short-term goal.
• Stop-loss below $355 to protect against a breakdown.

Volatility on the Horizon: Balancing AI Hype and Reality

The next few days will be critical. If AVGO closes above $370 by Dec 19, it could signal that bulls are regaining control. But if it falls below $355, the 200-day MA at $338.30 becomes a new battleground. The AI backlog is a long-term tailwind, but near-term margin pressures could keep the stock volatile.

Bottom line: This is a stock caught between two worlds. The options market is pricing in a potential rebound, but the fundamentals are a mixed bag. For traders, the key is to play the probabilities—back the $355 floor with puts or a $370 rebound with calls, but keep a tight stop. The AI story isn’t over, but patience will be rewarded.