Broadcom stock (NASDAQ: AVGO) is under pressure heading into Wednesday’s earnings report.
Options pricing points to a move of roughly 7% after the fiscal third-quarter results. With Broadcom near $369, that implies an approximate range of $400 on the upside or below $343 on the downside.
The stock has fallen about 25% from its June peak even as Wall Street expects revenue near $29.4 billion and adjusted earnings of about $3.24 a share.
Broadcom needs more than another earnings beat
The challenge for Broadcom is that strong numbers are already expected.
The company guided to roughly $29.4 billion in third-quarter revenue, up 84% from a year earlier, while analysts expect adjusted EPS to nearly double.
Its previous earnings report showed why the bar has become so high. Broadcom delivered strong results, yet the shares fell sharply the next session as investors focused on unchanged long-term AI guidance and the absence of a larger upside surprise.
Benchmark analyst Cody Acree sees the recent pullback creating a “better tactical setup” ahead of earnings, according to TipRanks.
The analyst expects about $29.4 billion of revenue and $3.24 in EPS and maintains a Buy rating with a $545 target.
But the focus is likely to be on what comes next. A modest beat may not be enough to push the shares towards $400 if management does not provide stronger evidence that AI revenue is accelerating.
Google fears could decide whether AVGO breaks higher
Competition around Alphabet’s Google has become one of the biggest investor concerns.
Google has expanded custom-chip work with Marvell while continuing to use other silicon partners, raising questions over Broadcom’s long-standing role in the TPU programme.
JPMorgan analyst Harlan Sur believes those worries are “overstated,” according to MarketWatch. Sur kept an Overweight rating and $580 target, arguing that recent channel checks suggest Google is adding partners rather than displacing Broadcom.
UBS analyst Timothy Arcuri has reached a similar conclusion. TipRanks reported that he does not see Marvell as “cannibalizing AVGO’s share or opportunity” at Google and expects Broadcom to stress that it remains Google’s “plan of record.”
Still, Arcuri trimmed his fiscal 2027 AI revenue estimate by about $5 billion to roughly $130 billion and lowered his target to $470 from $485.
The $100 billion AI promise matters most
Broadcom has previously outlined a path to more than $100 billion in fiscal 2027 AI revenue, but investors have wanted more detail around how quickly that target will convert into quarterly sales.
Jefferies analyst Blayne Curtis expects Broadcom to remain dominant in Google’s TPU supply chain, while warning that exceeding already elevated AI expectations could become more difficult.
JPMorgan’s Sur expects fiscal 2026 AI revenue to exceed $56 billion, while UBS sees roughly $130 billion in fiscal 2027.
That is why the options market is pricing an expectations event rather than a routine earnings report.
For a move towards $400, investors will likely need strong fourth-quarter AI guidance, confidence in the fiscal 2027 target and reassurance on Google.
A drop below $343 may require less. A cautious outlook, slower customer ramps or another quarter that merely meets lofty expectations could be enough.
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