Broadcom Surges 2.87% as Institutional Buying and AI Demand Fuel Momentum

Summary
• AVGO surges 2.87% to $301.33, nearing 52-week high of $306.95
• Institutional investors boost holdings by 2.6%–57.8% in Q1 2025
• AI infrastructure growth and $0.59 dividend drive investor optimism

Broadcom’s stock rallied sharply on August 6, 2025, driven by aggressive institutional buying and surging demand for AI infrastructure. With a 20.2% YoY revenue growth and a $1.58 EPS beat, the semiconductor giant is capitalizing on its Jericho4 networking chip and VMware Cloud Foundation expansion. The stock’s intraday range of $291.90–$301.38 highlights its volatility amid a $1.38T market cap.

Institutional Buying and AI Demand Drive AVGO's Rally
Broadcom’s 2.87% surge stems from a confluence of institutional accumulation and AI-driven demand. Cornerstone Advisors, Vanguard, and Exencial Wealth Advisors collectively increased AVGO holdings by 2.6%–57.8% in Q1 2025, signaling confidence in its AI infrastructure and VMware Cloud Foundation growth. The company’s $15B Q2 revenue, bolstered by 20.2% YoY growth and a $1.58 EPS beat, underscores its dominance in AI networking chips like Jericho4. Additionally, the $0.59 quarterly dividend (88.39% payout ratio) and analyst price targets up to $315 reinforce its appeal in a high-margin semiconductor sector.

Semiconductor Sector Mixed as MRVL Slides 2.17% Amid AVGO's Rally
While AVGO surged, the semiconductor sector showed mixed performance. Marvell Technology (MRVL), a key competitor in AI chips, fell 2.17% on August 6, reflecting divergent investor sentiment. AVGO’s rally was fueled by VMware Cloud Foundation’s 25% YoY growth and AI infrastructure tailwinds, whereas MRVL’s struggles highlight competitive pressures in the custom AI chip market. The sector’s 0.74% daily gain, however, indicates broader AI-driven optimism, with AVGO outperforming peers like Intel and Micron.

Options Playbook: AVGO20250815C300 and AVGO20250815C305 Lead the Charge
• MACD: 8.51 (bullish divergence from signal line 9.16)
• RSI: 58.07 (neutral, avoiding overbought/oversold extremes)
• Bollinger Bands: Price at $301.33 (near upper band $303.07)
• 200D MA: $215.66 (far below current price, strong bullish trend)

AVGO’s technicals suggest a continuation of its rally. Key levels to watch include the 30D support ($264.55) and 200D support ($177.56). A break above $306.95 (52W high) could trigger a retest of $315 (analyst target).

Top Option 1: AVGO20250815C300
• Code: AVGO20250815C300
• Type: Call
• Strike: $300
• Expiry: 2025-08-15
• IV: 36.76% (moderate)
• Leverage: 35.93%
• Delta: 0.5578 (moderate sensitivity)
• Theta: -0.906 (high time decay)
• Gamma: 0.0215 (high sensitivity to price moves)
• Turnover: $1.16M
• Payoff (5% upside): $5.37/share
This contract balances leverage and liquidity, ideal for a bullish continuation. Its high gamma ensures responsiveness to AVGO’s upward momentum.

Top Option 2: AVGO20250815C305
• Code: AVGO20250815C305
• Type: Call
• Strike: $305
• Expiry: 2025-08-15
• IV: 35.47% (moderate)
• Leverage: 52.49%
• Delta: 0.4471 (moderate sensitivity)
• Theta: -0.790 (high time decay)
• Gamma: 0.0223 (high sensitivity to price moves)
• Turnover: $323.8K
• Payoff (5% upside): $3.09/share
This option offers aggressive leverage for a smaller price move, suitable for traders targeting a $305–$310 breakout.

Action Insight: Aggressive bulls may consider AVGO20250815C300 into a bounce above $305, while AVGO20250815C305 offers high-reward potential if AVGO breaks $306.95.

Backtest Broadcom Stock Performance
The backtest of AVGO's performance after an intraday surge of at least 3% indicates positive short-to-medium-term gains, with win rates and returns increasing across 3-, 10-, and 30-day horizons. The highest return during the backtest was 11.28% over 30 days, suggesting that such intraday surges can lead to substantial gains if followed by a buy-and-hold strategy.

Bullish Setup Confirmed: AVGO Eyes $306.95 52W High as Sector Rotation Intensifies
Broadcom’s rally is underpinned by institutional buying, AI infrastructure growth, and a robust earnings profile. The stock’s proximity to its 52W high ($306.95) and a 200D MA gap of $215.66 suggest a strong continuation case. While the semiconductor sector remains mixed (MRVL down 2.17%), AVGO’s VMware Cloud Foundation and Jericho4 momentum position it as a leader. Investors should monitor the $305–$306.95 range for a breakout confirmation. Aggressive bulls may consider AVGO20250815C300 into a retest of $305, while AVGO20250815C305 offers high-reward potential if the 52W high is breached.