AVGO Options Signal $400 Bullish Battle: How to Play the AI-Driven Breakout

• Broadcom’s price target just jumped to $460—backed by Google TPU dominance
• Options data shows heavy call buying at $400 and $410 strikes ahead of Friday’s expiry
• Q4 earnings on Dec 12 could unlock $6.2B in AI revenue—read the margin risks

Here’s the takeaway: Broadcom’s options market is locked in a tug-of-war around the $400 level, with institutional money betting on a breakout. Technicals and news both point to upside, but margin pressures loom. Let’s break it down.

The $400 Bullish Battleground: What Options Reveal

Options traders are piling into AVGO’s $400 and $410 calls this Friday, with 9,896 and 7,614 open contracts respectively. That’s not just noise—it’s a vote of confidence in the $460 price target analysts just slapped on the stock. The put/call ratio is nearly balanced (1.03), but the skew is telling: 98% of call open interest sits above $385, while puts cluster below $365.

Think of it like a chess match. Bulls are hedging a push above $400, while bears are bracing for a drop to $365. The lack of block trades means no whale-sized bets are distorting the market—this is pure retail and institutional momentum. Your takeaway? A close above $400 this week could trigger a cascade of call options expiring in the money, fueling a short-covering rally.

Why Google’s TPU Play Matters for AVGO’s Price Action

BofA’s $460 target isn’t just a number—it’s a math problem. Google’s Gemini 3 AI model, trained entirely on Broadcom’s TPUs, is 40% more efficient than NVIDIA’s chips. If external TPU rentals take off, Broadcom’s ASPs could double by 2026. That’s why UBS and Mizuho are hiking targets to $472 and $435.

But here’s the catch: Q4 earnings show AI revenue will surge 66% YoY to $6.2B, but gross margins are expected to drop 7.8 points. The stock’s 96x P/E leaves zero room for error. If margins hold, AVGO becomes a must-buy. If they slip, the rally could stall. The options market’s $400 focus? It’s betting management can navigate this tightrope.

3 Ways to Play the AVGO Breakout—With Exact Strike Levels

1. Short-Term Call Play: Buy AVGO20251205C400 (this Friday’s $400 call) at ~$1.20. Target: $400 close by expiry. If it hits, roll into AVGO20251212C405 next week for a 5% buffer.
2. Stock Entry Strategy: Buy AVGO at $381.10 with a stop at $376.53 (intraday low). First target: $390 (Bollinger Middle Band). Second: $400 (key resistance).
3. Hedge with Puts: Buy AVGO20251205P365 at ~$1.80 to protect against a drop to $362.42 (Bollinger Middle Band).

Volatility on the Horizon: What to Watch Before Dec 12

Broadcom’s $110B backlog is half AI-related, but converting that into cash is the real test. If Q4 revenue hits $17.4B and AI revenue cracks $6.2B, the $400 level becomes a floor. But watch gross margins—if they fall below 57%, the rally could stall.

Your cheat sheet: Buy AVGO20251205C400 if you’re bullish on the $460 target. Sell AVGO20251205P365 if you’re hedging. And for stock buyers, $381.10 is your entry—$400 is your exit. The next two weeks will tell if this is a $400 breakout or a $365 breakdown. Time to pick a side.