⚠️ [3 DAYS LEFT] THIS will MAKE or BREAK THE MARKET! URGENT Broadcom Earnings: WATCH IF YOU OWN AVGO

Added: 2026-06-02

[00:00:05]What's up everyone? It's Karth Money.

[00:00:07]Let's get ready for Broadcom's big earnings coming out. It's going to be one of the one of the last stocks to report earnings that is in the trillion dollar club, if not the last. Uh, and it is again valued at well over $2.1 trillion. Broadcom is a giant when it comes to the semiconductor space and of course is part of the top 10 most valuable companies in the US and also in the world as well on Friday pushing up over 4.7% ahead of the earnings trading up to $446. In this video I'm going to break down everything you need to know ahead of the earnings. Where's the options activity? Where's the skew?

[00:00:50]Where's the max pain? Where's the technicals? where's the potential fundamental fair value, where the valuations are trading, and what we need to look out for in this earnings moving forward. As always, make sure that you drop a like and subscribe to the channel. Again, links going to be down below. There is a 20% annual discount that is expiring very soon. You get access to all the trade alerts, members onlyly videos, portfolio updates, Discord channels, educational videos, as well as the Moneyst website access as well. Any questions, feel free to reach out. My email is [email protected] and I'm more than happy to help. So when it comes to Broadcom, we are talking again a $2 trillion business and there is a fair warning of about a hundred billion dollar market value volatility on the back of these earnings and also the options activity is representing about a 7% swing for for Broadcom in either direction. That's what the options activity is suggesting for. Are we going to see that? Of course, we'll find out uh on June 3rd. So, that's when they are going to be reporting their earnings. And this is going to be for the second quarter of fiscal year 2026.

[00:01:57]Projected revenues at $22 billion.

[00:02:01]That's going to be an increase of 47% on a year-over-year basis with AI chip revenue expected to hit just under 11 billion. And the key focuses include AI demand sustainability, backlog conversion, custom chip shipments, and operating margins post VMware acquisition. While analysts maintain a strong buy rating on potential risks include structural profitability pressure and order growth deceleration, long-term AI revenue guidance and order updates are critical for future trends as well. Now given that AMD, Nvidia, a lot of companies in the semi space reported some very strong numbers. I have no doubt that Broadcom's also going to come out with flying colors with beating expectations. In fact, if you come over to our Money Vest platform and simply look at their earnings volatility, in the last 12 quarters, they've got a 91% almost a 92% hit rate when it comes to beating expectations on EPS. That's 12 quarters. That's the last three years worth of analysis. They have a very strong track record of beating expectations. On the revenue side, it's 75%. Again, 3/4 of the time they have beating beaten expectations. And the average movement, the median movement expected is going to be around 7 to 8% for Broadcom. If you look at the last few earnings uh for Broadcom here and what the actual momentum has been, we are looking at a 4.8% upside swing in the last earnings. The earnings before that, Broadcom dropped 11%. The earnings before that, it was up 9.4% and then down 5% up 8%. So, it is not a nonvolatile stock. It's not like it doesn't do anything, right? The last time it actually didn't do anything was probably back when it was only up 2%.

[00:03:45]And that was in 2023, but more recently since 2024, 25, 26, it has been quite a volatile stock to trade post earnings because it does move there. It does create a lot of interesting volatility.

[00:03:59]Now, we're going to come back to analyst estimates, the valuation. Before that, I want to go over to some of the important notes to look for. So backlog visibility very important. So keep a close eye on their backlog of AI chips and data centers. Uh it hovered around $73 billion mark in the past in terms of how much backlog they have. Watch for management's updates to this multi-year trajectory. How many orders have been coming in and what's the current backlog for servicing those clients. Hyperscaler dependencies. right monitoring how many contracts have been signed because they do have a lot of contracts and agreements with companies like OpenAI, Anthropic, Meta, Google, right? So, Broadcom has established partnerships with six leading AI companies including Google, Meta, Anthropic and OpenAI and is deeply involved in the research and development and production of their proprietary chips. Related long-term orders are locked through 2028 providing solid support for performance over the next 3 years. So, again, that's also very important for us to look at. So, but also we don't want super concentration. So, hyperscaler dependency is not something we want to look at. We also want to look at mid-market lower market cap companies and what are they partnering up with Broadcom for AI networking. So, looking for updates on their networking business. So, Tom Hawk and Draco products while typically make up about a third of their total AI related uh revenue options market pricing. Let's take a look at that. There is a big divergence here regarding this earnings report which has widened significantly based on the current open interest.

[00:05:24]Broadcom's implied market cap volatility on the day is approximately 100 to 150 billion for for the following day June 4th right and that's an implied volatility for the stock at 7.5% which also what our platform shows 7 to 8% is what the expected volatility is going to look like again volatility is not direction because it says 7% 8% doesn't mean it's going to go higher or lower that is just the movement the expected movement the direction is still unknown right that's the that's the fascinating part about the market historical data shows that in four of the last eight earnings releases, Broadcom's actual stock price movement exceeded volatility implied by the options market. In most recent report, uh this actual move was 2.2% lower than the implied 8.1%. In December 2025, the stock fell 5.4% also lower than the 6.3% implied volatility.

[00:06:13]So that is something to keep in mind as well. And coming over to some important key takeaways because of the first quarter 2026 results being extremely strong. Revenues coming in at just under 20 billion. Semiconductor solutions generating 12.5 billion accounting for 65% of the total infrastructure software revenue just under 6.8 million 6.8 billion representing about 35%. Uh the company's AI semiconductor business experienced a rapid growth with first quarter revenues reaching 8.4 billion 106% year-over-year growth. This is expected to hit a new all-time high or new record I should say just under 11 billion. That's the that's the consensus and AI revenue for the second quarter is projected at 10.7 billion as I pointed out with a staggering growth of 140%. So that is where the core of their growth is coming from more than doubling on the AI chip business and Broadcom has established partnerships which I mentioned earlier. Now, this is the open interest for this Friday, this upcoming Friday. Um, calls and puts. And the current put call ratio sits at 046, meaning there's an overwhelming majority of calls out there for Broadcom than there are puts. Puts are very, very minimal. We do have some puts. We've got a 380 put. We've got a $400 put. Then we've got a 390 put. And then we have some 420, 410, and 385 puts. That's it.

[00:07:29]These are very low open interest, though. We're talking 2,000 contracts, another 25 2600 contracts. So, you know, combined we're looking at, let's say, 7,500 and this is going to make up for six.

[00:07:41]So, 13 14,000 uh is what we're looking at in terms of the um put call put open interest just for these. But the total open interest for the put side is 35,000 contracts. 34 34,000 contracts. And the call side is more than double at over 74,000 calls currently open with 420, the key number. 420 being the magical number at over 13,700 contracts. And then we've got 640.

[00:08:08]Imagine what a huge margin there. 420 and 640 call. These are way out of the money. Obviously, Broadcom's not getting up there, but there's still 7,255 brave souls that have calls for 640 on Broadcom. We got 430, 470, uh, 4,000, 3,800. So again, a lot of in the 3 to 4,000 contracts of current open interest, overwhelming bullish sentiment skew. And the max pain 415. This is where most options contracts expire worthless and out of the money. This is the max pain for all the buyers. If Broadcom closes below 415 on June 5th this Friday, most of these options contracts are going to expire out of the money and worthless creating maximum pain for options buyers and maximum profit and benefit for options sellers.

[00:08:55]So 446 is where we are. 415 in fact is going to be a drop of about exactly 7.3%. This is what the market is also pricing in. Uh a 7 12% move. Again the direction is quite unknown. Now coming over to the actual fundamentals right so what are we looking at in terms of the earnings right earnings for this year for this entire year the average is about 1126 which represents about a P multiple of 39 I think Broadcom's a little bit on the expensive side compared to Nvidia compared to let's say ASML or you know some of the other even Micron to to that extent Orisa Network Lamb Research TSMC a lot of the other semiconductor stocks I think Broadcom is one of the more expensive ones But the growth rate is insane. I mean, it's more than doubling revenues. It's really exploding in terms of the revenue and the earnings per share um as well. So, revenues keep accelerating. Upside, 20 time sales. Again, in my opinion, I think it's a little bit too high.

[00:09:54]Broadcom, I love Broadcom. It's part of the shopping list. I've owned Broadcom.

[00:09:57]I've traded it. But I think the valuation needs to be studied a bit more um or not really studied but needs to be evaluated a bit more in order for us to really understand okay how much more upside does this sock really have in the short to medium term as the business is still growing but the market has mostly priced in a lot of that uh a lot of that business growth there right because the valuations exceeded now it's already trading at all-time highs you know prior to the earnings it was consolidating sideways here in this range so if you come over to the daily chart we had picked up Broadcom in the 290s these low 300s as you guys already know. Then I traded this all the way up to 420s and nice 50 52% jump right. So it has gained quite a bit of market value in the last 30 45 days and trading at all-time highs with a very strong breakout on Friday with very high volume as well. Twice the volume 41 million shares traded on Friday versus 19 million which is the average 30-day volume. So very strong break to the upside. Is it going to gap up even more after earnings 7% trade up to 460 470? Possibly. But in my experience and sim very similar to Nvidia which we did understand as well prior to the earnings the bullish skew was massive right there was a lot of call option activity and well guess what happened after the earnings Nvidia stock dropped after reporting some very strong numbers right it's down almost 7% from earnings it is in a correction now down over 10% from its all-time highs almost 11% at this point so I do kind of again I'm not one for making predictions but the market's extremely bullish on Broadcom's earnings um I have no doubt they're going to come out with stronger beats. Guidance is going to be strong.

[00:11:30]But right now, we're at a stage where semiconductor expectations are so high that even if these companies meet or even slightly beat expectations, it's not a bigger beat, right? And that can cause some concern, some uh pullbacks or some dips similar to what we just experienced for Nvidia. Nvidia also had a very similar setup where options activity was very bullish. we had a very strong skew on the call side and then it dropped 6 7% post earnings. Right? So it is not uncommon for us to see that especially when the stock's been running prior to the earnings leading into earnings and then it starts to kind of pull back a bit and and Broadcom also had that has that added risk of valuation because I think 40 times earnings 20 times sales is a little too much compared to where Nvidia was let's say you know a week ago trading at those prices. So I'm a bit more careful and cautious. It's still going to be part of my long-term shopping list of quality stocks that I want to buy and add and, you know, just keep for the long term, but the price matters and $46 is going to be a very strong support. Uh, if we do break down to those levels and if if it gets a further breakdown, 352 by far, in my opinion, is going to be a much better buying opportunity, much better dollar cost averaging opportunity right around those prices. And of course, we're sitting at alltime highs. So, there's not really much for us to go over. Thank you so much for joining and watching this video. uh share this with any other Broadcom trader investor that can benefit from this analysis. And again, links going to be down below if you're interested in joining with that 20% annual while we'll discount available for a few more days. Any questions, email me at adminoneyvest.com and I'm more than happy to help. As always, happy investing. I'll see you all in the next video.