Broadcom (AVGO) Surges 9.27% on OpenAI Partnership: Is This the New AI Powerhouse?

Summary
• Broadcom (AVGO) surges 9.27% to $354.71, hitting an intraday high of $359.37
• OpenAI collaboration and $10B AI chip order drive frenzy in semiconductor sector
• Options volume spikes 347% as traders bet on continued momentum
• Sector leader Intel (INTC) gains 1.94%, signaling broader tech optimism

Broadcom’s stock is racing to record highs on a blockbuster partnership with OpenAI to develop custom AI accelerators. The $10B order, coupled with easing U.S.-China trade tensions, has ignited a surge in semiconductor demand. With options activity surging and technical indicators flashing bullish signals, investors are scrambling to position for the next phase of AI-driven growth.

OpenAI Partnership Ignites AI Infrastructure Hype
Broadcom’s 9.27% rally stems from a strategic agreement with OpenAI to deploy 10 gigawatts of custom AI accelerators. The partnership, announced on October 13, 2025, positions Broadcom to supply OpenAI with XPUs starting in 2026. This follows a $10B AI chip order from an unnamed customer (widely speculated to be OpenAI) revealed during Q3 earnings. The deal aligns with OpenAI’s $1T AI compute spending spree, accelerating demand for high-performance chips. Analysts at Mizuho and Cantor Fitzgerald raised AI revenue growth estimates to 76%, citing the partnership as a 'new industry benchmark' for scalable AI clusters.

Semiconductor Sector Rally: Intel (INTC) Gains 1.94% as AVGO Leads AI Charge
The semiconductor sector is surging on AI infrastructure optimism. Intel (INTC) climbed 1.94% on news of a $5B Nvidia investment and a $20B Arizona chip plant. TSMC and ASML also gained traction as global demand for AI chips intensifies. Broadcom’s 9.27% move outpaces peers, driven by its exclusive OpenAI deal and $10B order visibility. The sector’s rally reflects a broader shift toward AI-driven computing, with OpenAI’s $1T compute spend acting as a catalyst.

Options Playbook: High-Leverage Calls for AVGO’s AI Momentum
• 200-day average: 249.60 (well below current price)
• RSI: 37.39 (oversold territory)
• MACD: 3.08 (bullish divergence)
• Bollinger Bands: Price at 354.71, above upper band of 359.30

AVGO’s technicals suggest a continuation of its AI-driven rally. The RSI at 37.39 indicates oversold conditions, while the MACD histogram (-2.00) shows narrowing bearish momentum. Bollinger Bands confirm overbought conditions, with price near the upper band. Key support at 340.15 (middle band) and resistance at 359.30 (upper band) define the near-term range.

Top Options Contracts:
• AVGO20251017C360
- Type: Call
- Strike: $360
- Expiry: 2025-10-17
- IV: 52.87% (moderate)
- Leverage Ratio: 51.90% (high)
- Delta: 0.435 (moderate sensitivity)
- Theta: -1.84 (rapid time decay)
- Gamma: 0.01789 (strong price sensitivity)
- Turnover: $14.6M (liquid)
- Payoff at 5% upside (372.45): $12.45 per contract
- Why it stands out: High leverage ratio and gamma make this call ideal for a 5% price move. Theta decay is manageable given the October 17 expiry.

• AVGO20251017C367.5
- Type: Call
- Strike: $367.50
- Expiry: 2025-10-17
- IV: 51.51% (moderate)
- Leverage Ratio: 88.01% (very high)
- Delta: 0.305 (lower sensitivity)
- Theta: -1.44 (slower decay)
- Gamma: 0.01634 (moderate sensitivity)
- Turnover: $724.98K (liquid)
- Payoff at 5% upside (372.45): $4.95 per contract
- Why it stands out: Exceptional leverage ratio for aggressive bulls. Lower delta reduces directional risk but requires a larger price move to profit.

Action Plan: Aggressive bulls should prioritize AVGO20251017C360 for its balance of leverage and liquidity. Conservative traders may use AVGO20251017C367.5 as a high-risk/high-reward play. Monitor the 340.15 support level; a break below could trigger a pullback.

Backtest Broadcom Stock Performance
Here are the back-test results for the “RSI14 Oversold, 1-Day Hold” strategy on NVDA (2022-01-01 → 2025-10-13):• Total return: 683.7 % • Annualised return: 69.5 % • Max draw-down: 60.8 % • Sharpe ratio: 1.28 Notes on auto-filled parameters 1. Price type → Close (commonly used in daily-frequency back-tests). 2. Risk control → None (left empty because you only specified a fixed 1-day exit rule). Open the interactive panel below to examine trade-by-trade equity curves, distribution tables and other details.

AVGO’s AI Bet: Ride the Wave or Watch the Volatility?
Broadcom’s AI-driven rally shows no signs of slowing, with OpenAI’s $10B order and $1T compute spend fueling demand. Technicals and options activity confirm strong momentum, but the 37.39 RSI suggests a potential pullback. Investors should watch the 340.15 support level and sector leader Intel (INTC), up 1.94%, for broader market cues. Aggressive bulls may consider AVGO20251017C360 for a 5% upside target. If $340.15 breaks, re-evaluate exposure. The AI semiconductor race is on—position accordingly.