AVGO Options Signal Bullish Bias: Target $360 Calls as AI Momentum Drives Near-Term Upside

• AVGO trades at $348.84, down 0.4% from its 52-week high of $351.1625.
• Options data shows heavy call open interest at $360 (next Friday expiry) and $350, with a near-even put/call ratio.
• AI-driven revenue growth and a $11B Anthropic order could fuel a breakout above $350.

The options market and technicals are painting a clear picture: Broadcom is perched at a crossroads. Calls at $360 and $350 dominate open interest, while RSI (39.45) and MACD (-6.6) hint at oversold conditions. Here’s what to watch:

Bullish Calls at $360 Signal Institutional Confidence

The top OTM call for next Friday (AVGO20260102C360) has 8,587 open contracts—nearly double the $350 strike. This suggests institutional players are hedging for a $360+ move, likely tied to Broadcom’s AI revenue surge. Meanwhile, puts at $330 (12,132 OI) and $310 (9,538 OI) show bearish caution, but the 0.99 put/call ratio (by open interest) means bulls aren’t backing down.

The key takeaway? A $360 breakout could trigger a short-covering rally, especially with Bollinger Bands widening (upper at $429.65). But watch the 30D support zone ($339.93–$341.67)—a break below that would validate the puts.

AI Revenue and Earnings Momentum Fuel the Narrative

Broadcom’s Q4 results were a blockbuster: $18.02B revenue, $1.95 EPS, and $6.5B in AI sales. CEO Hock Tan’s $11B Anthropic deal and custom chips for Meta/OpenAI are real catalysts. Analysts like J.P. Morgan’s Harlan Sur ($475 target) and Morningstar’s William Kerwin ($480) are betting on $25B in annual AI revenue by 2027.

But here’s the catch: insider selling (Tan sold $42.4M in shares) and a P/E of 73.57 raise valuation concerns. The stock’s 12% drop since November suggests profit-taking, but the $8.2B Q1 2026 AI revenue forecast could reignite optimism.

Actionable Trade Ideas for AVGO

• Options Play: Buy AVGO20260102C360 calls at $3.50–$4.00. Target $370 (3.3% move) for a 50%+ return if AI momentum holds.
• Stock Play: Enter near $340 support (30D range) with a stop below $338.29 (200D support). Target $360–$370 if the 30D MA (365.01) holds.
• Bearish Hedge: Buy AVGO20260102P330 puts at $8.00–$9.00 if the stock tests $339.93 support.

Volatility on the Horizon

Broadcom’s story hinges on AI demand and margin stability. The $360 call strike is a psychological hurdle—clearing it could spark a re-rating. But with short interest up 23.8% and insider selling, don’t ignore the risks. For now, the options data and earnings momentum lean bullish. If AI revenue keeps accelerating, AVGO could revisit $400+ by Q1 2026.

Bottom line: This is a high-conviction trade for AI believers. Play it with tight stops and a clear exit plan. The market’s eye is on $360—and so should yours.