AVGO Options Signal Bullish Bet at $400: Here's How to Play the AI Growth Catalyst

• Broadcom (AVGO) trades at $380.01, down 0.16% but clinging to its 30D support level of $339.98
• Call open interest spikes at $400 and $410 strikes for Friday expiration, while puts cluster at $365-$367.5
• Morgan Stanley just raised AVGO’s price target to $443, citing XPU demand and VMware growth

Here’s the takeaway: Options market makers are betting big on a $400+ breakout by Friday. With AVGO’s 30D moving average at 362.29 and Bollinger Bands widening, this stock is primed for a sharp move—up or down. Let’s break down why the $400 level is the linchpin for both bulls and bears.

Call OI at $400 and $410 Suggest Institutional Conviction in AI-Driven Upside

The options data tells a clear story: 9,896 open calls at the $400 strike (this Friday’s expiration) and 7,614 at $410. That’s not retail noise—it’s institutional positioning. Think of it like a football team stacking blockers at the 40-yard line; they’re expecting a big play. Meanwhile, puts at $365 (7,503 OI) and $367.5 (5,945 OI) show hedgers are bracing for a drop, but the put/call ratio (1.03) is nearly balanced. No massive block trades to skew the data—this is pure market sentiment.

The risk? If AVGO fails to hold above $376.53 (intraday low), those $400 calls could turn into fire sales. But given the 66% AI semiconductor growth forecast and $10B+ in AI-related backlog, I’d rather own the calls than the puts.

Morgan Stanley's $443 Target and Q4 Earnings Fuel 2026 Optimism

The news flow is a goldmine for AVGO bulls. Morgan Stanley’s $443 target isn’t just a number—it’s a signal that analysts see $60+ of upside in the current $380 price. The Q3 results? A masterclass in growth: $16B revenue, 63% YoY AI chip sales, and a $10B+ order from a fourth hyperscaler (Anthropic/OpenAI).

But here’s the twist: The market is already pricing in 40x forward earnings. If Q4 misses the $1.87 EPS estimate, volatility could spike. Yet the $385 call OI (4,742 contracts) suggests some traders expect a pre-earnings pop. This is a stock where bad news could still be good news—just ask Microsoft’s AI team.

AVGO20251205C400 and AVGO20251212C400 Calls: Strategic Entry Points for AI Momentum

For options traders: The AVGO20251205C400 (this Friday) and AVGO20251212C400 (next Friday) are your best bets. Why? High open interest means liquidity, and the $400 strike sits just 5% above current price. If AVGO cracks $385 by Friday, these calls could double. For a longer play, the AVGO20251212C405 (2,843 OI) offers slightly more leverage.

Stock buyers: Consider entry near $376.53 (intraday low) with a stop below $375. Target $385 first, then $400. If you’re bearish, the AVGO20251205P365 (7,503 OI) offers downside protection, but I’d only buy puts if AVGO breaks $362.42 (middle Bollinger Band).

Volatility on the Horizon: Positioning for AVGO’s AI-Driven Breakout

The next two weeks are critical. AVGO’s Q4 earnings on Dec 11 could validate or shatter the $443 price target. In the short term, the $400 call wall is a self-fulfilling prophecy—if enough buyers show up, the stock will hit that level. But don’t ignore the $365 put OI; a surprise earnings miss could trigger a 5% drop.

Bottom line: This is a stock where the options market and fundamentals are in sync. The AI tailwinds are real, but so are the risks of overvaluation. Play it smart: Use the $400 calls as a leveraged bet, but keep a tight stop. If AVGO breaks $400 cleanly by Friday, the $410 calls could be your next move. Either way, this is a name to watch in the AI arms race.