Broadcom Inc. (NASDAQ: AVGO) keeps sitting right at the center of the AI trade – and heading into a huge macro week and its own earnings report, traders are positioning for more fireworks.
On Tuesday, December 9, 2025, AVGO closed right near all‑time highs around $406, up roughly 1.3% on the day, and ticked slightly higher in after‑hours trading. That move came even as the Dow and S&P 500 finished lower ahead of Wednesday’s key Federal Reserve rate decision, with futures pricing in an 87% chance of another rate cut. [1]
At the same time, the options market is now pricing a ±6% swing for Broadcom after it reports Q4 FY 2025 earnings on Thursday, December 11, implying a potential trading range roughly between the high $370s and mid‑$420s by the end of the week. [2]
Below is a detailed look at what moved Broadcom stock after the bell on December 9 – and the key things investors may want to watch before the U.S. market opens on Wednesday, December 10, 2025.
Key Takeaways for Broadcom (AVGO) Before the December 10 Open
- Stock near record highs: AVGO closed around $406 on December 9, up about 1.3% on the day and just below its 52‑week high near $407, with after‑hours trading essentially flat to slightly positive. [3]
- Macro backdrop is huge: The Fed’s December 10 rate decision is expected to deliver another 25 bps cut to a 3.5%–3.75% target range, a key factor for richly valued AI leaders like Broadcom. [4]
- Q4 earnings could be a make‑or‑break catalyst: Wall Street expects ~$17.4–17.5 billion in Q4 revenue (+24% YoY) and EPS around $1.87–$1.88 (+32% YoY), with AI revenue alone projected at roughly $6.2+ billion, up about 66% from a year ago. [5]
- Options market braced for a big move: Based on current options pricing, traders are betting on a ±6% post‑earnings move, versus a ±5.5% implied move before last quarter’s report – which Broadcom actually exceeded with a +9.4% jump. [6]
- AI narrative keeps getting bigger – and riskier: Analysts now see AI revenue of ~$20–21 billion in FY 2025 and up to $50+ billion in FY 2026, with CEO Hock Tan’s long‑term incentives tied to the possibility of $120+ billion in AI revenue by 2030. [7]
- Valuation is stretched but supported by growth: AVGO trades around 40–45x forward earnings and roughly 47x forward free cash flow, well above historical averages, even as analysts forecast total revenue to climb from $63.4 billion in FY 2025 to ~$177 billion by FY 2029. [8]
How Broadcom Traded on December 9, 2025
Price action: grinding higher into catalysts
On Tuesday:
- Closing price: Around $406, up about 1.3% on the session.
- Intraday range: Roughly $398–$407, with the stock briefly tagging or approaching fresh record territory. [9]
- After‑hours: AVGO traded modestly higher in the post‑market (roughly +0.01–0.06%), signaling no major new information had hit the tape after the bell. [10]
Volume ran well above some recent averages as traders squared positions ahead of both the Fed decision and Thursday’s earnings report, consistent with a stock that has become a core vehicle for AI‑themed exposure.
Broadcom’s move also fits within a broader uptrend:
- The shares have returned ~118–120% over the past 12 months, far outpacing the broader tech sector and the semiconductor industry. [11]
- AVGO’s 50‑day moving average sits near $358, and the 200‑day near $314, underlining how extended the stock is versus its longer‑term trend. [12]
In other words, Tuesday’s after‑hours tape shows a name that’s calm, but sitting on a mountain of built‑in expectations.
The Macro Backdrop: Fed Cut Odds and AI Sentiment
Broadcom doesn’t trade in a vacuum. On December 9, broader markets were mixed:
- Dow Jones: ‑0.4%
- S&P 500: ‑0.1%
- Nasdaq: +0.1% [13]
Investors were laser‑focused on Wednesday’s Federal Open Market Committee (FOMC) meeting:
- Markets are pricing an ~87% probability of a 25 bps rate cut to a 3.5%–3.75% range. [14]
- October JOLTS job openings came in at 7.67 million, above expectations (~7.2 million), nudging the 10‑year Treasury yield up to about 4.19%. [15]
Lower rates are generally supportive of high‑multiple growth names like Broadcom, but there’s a catch: if the Fed’s tone around inflation or 2026 policy is more hawkish than expected, richly valued AI leaders could see sharp volatility.
Why Broadcom Keeps Rallying: AI, Custom Chips and Cloud Giants
Microsoft vs. Marvell: a potential shift in custom chip power
One of the most important under‑the‑surface narratives this week is the competition for custom AI chip contracts among hyperscale cloud providers.
- A recent report suggested that Microsoft may shift parts of its custom AI chip work from Marvell Technology to Broadcom, sending Marvell shares sharply lower while AVGO gained ground. [16]
- Benzinga notes that such a shift would reinforce Broadcom’s strength in ASICs and networking silicon, particularly for hyperscalers that want tailored AI accelerators and tightly integrated networking. [17]
Even though there’s still debate about the timing and scope of any contract transitions – and some analysts argue the Marvell fears are exaggerated – the market clearly sees Broadcom as gaining momentum in custom AI silicon.
JPMorgan: AI revenue ramp and a $50B+ 2026 scenario
JPMorgan analyst Harlan Sur recently laid out a very bullish roadmap for Broadcom: [18]
- Q4 FY25 expectations:
- Total revenue: $17.5 billion+, slightly ahead of consensus.
- AI revenue: $6.5–6.7 billion, above Street estimates.
- January quarter guidance:
- Revenue: $19 billion+, with AI revenue near $8 billion.
- Full‑year forecasts:
- FY 2025 AI revenue: $20–21 billion, up around 60% YoY.
- FY 2026 AI revenue: $50+ billion, driven by:
- Google’s TPU v6 (Ironwood) ramp,
- Meta’s MTIA inference chips,
- Early OpenAI XPU work, and
- Next‑gen Tomahawk 6 networking products.
Sur maintains an Overweight rating and calls Broadcom his top semiconductor pick, citing best‑in‑class margins and free‑cash‑flow growth supported by VMware synergies. [19]
Hock Tan’s long‑term AI ambitions
At a recent tech conference, CEO Hock Tan essentially sketched out the “big dream”:
- Broadcom expects ~$20 billion in AI revenue for FY 2025,
- And Tan’s long‑term incentive package is tied to reaching over $120 billion in AI revenue by 2030 – roughly a 6x increase in five years. [20]
Barchart reports that analysts project: [21]
- Total revenue rising from $63.43 billion in FY 2025 to about $177 billion by FY 2029.
- Free cash flow climbing from $29.51 billion to $94 billion over the same period.
That kind of growth is what’s feeding valuations – and expectations – into Thursday’s earnings event.
Earnings Preview: What Wall Street Expects on December 11
Broadcom will report Q4 FY 2025 results after the market close on Thursday, December 11, 2025. [22]
Consensus numbers (as of December 9)
Across multiple sources, expectations are tightly clustered: [23]
- Revenue:
- Company guidance: about $17.4 billion
- Analyst consensus: $17.4–17.5 billion (≈ +24% YoY)
- Adjusted EPS:
- Consensus: $1.87–$1.88, roughly +32% YoY
Segment‑level expectations from Zacks/Finviz & others: [24]
- AI‑related semiconductor revenue:
- Expected around $6.2+ billion, ~+66% YoY.
- Total semiconductor revenue:
- Guided to about $17.4 billion, up 24% YoY.
- Infrastructure software (largely VMware):
- Expected to grow about 15% YoY to roughly $6.7 billion.
- Margins:
- Guidance implies a 70 bps sequential decline in gross margin, mainly due to the mix shift toward lower‑margin AI XPUs.
Morningstar, for its part, expects AI revenue to roughly double to ~$40 billion in fiscal 2026, underscoring how much of Broadcom’s growth story is tied to AI infrastructure. [25]
Options Market Signals: A ±6% Earnings Bet
The options market is often the cleanest way to see what traders think might happen around an event.
According to Investopedia’s analysis of current pricing: [26]
- Traders are pricing in a move of up to ~6% in AVGO by the end of this week.
- Based on Monday’s close, that implies a rough post‑earnings range of about $377 to $425.
For context:
- Before the September 2025 earnings release, the options market implied a ±5.5% move,
- But the stock actually surged about 9.4% after Broadcom beat estimates and raised guidance, blowing past the implied range. [27]
If Broadcom simply matches expectations without raising guidance – in the context of a 40–45x forward multiple – the risk of a sharp move down is real. Conversely, another big beat and raised AI outlook could justify a breakout above the top end of that implied range.
What Analysts Are Saying Right Now
Fresh price target hikes
In just the past few days, several firms have raised their targets on Broadcom:
- Rosenblatt Securities:
- Rating: Buy
- Target raised from $400 to $440 (≈ +9–10% upside from recent levels). [28]
- HSBC:
- Rating: Buy
- Target: $535, citing strong ASIC momentum and demand for Google’s TPUs, which Broadcom designs and manufactures. [29]
- Earlier in December, other firms including UBS, BofA, Oppenheimer and Susquehanna also raised targets into the $435–$472 range. [30]
TipRanks notes that: [31]
- Wall Street’s consensus is “Strong Buy” based on 24 Buys and 2 Holds,
- With an average price target around $432–$412 (TipRanks vs. Barchart samples), implying mid‑single‑digit upside from current prices.
The bull and bear cases in a sentence each
- Bull case: Broadcom sits at the intersection of custom AI accelerators, high‑performance networking, and mission‑critical infrastructure software, with AI revenue growing 60%+ and a long runway from hyperscale customers like Google, Meta, and potentially more business from Microsoft and OpenAI. [32]
- Bear case: The stock already trades at premium multiples versus its own history and peers, margins may compress as XPUs mix up, and big customers like Google are exploring designing more of their own chips, potentially eroding Broadcom’s moat over time. [33]
Zacks/Finviz currently tags the stock with a Hold rating, citing stretched valuation (forward P/E ~41x vs. sector ~29x) and the risk that even strong results might not justify further multiple expansion. [34]
Institutional Positioning and Insider Activity
MarketBeat’s latest 13F‑driven reports from December 9 highlight how “crowded” Broadcom has become in institutional portfolios: [35]
- Goldstream Capital Management increased its AVGO position by 22.5% in Q2 to 64,401 shares, making Broadcom about 5.9% of its assets and its 6th‑largest holding.
- Daiwa Securities Group lifted its stake by 1.2% to nearly 2.95 million shares, making AVGO its 7th‑largest position, worth over $800 million at the time of filing.
Overall, roughly 76% of AVGO shares are held by institutions and hedge funds. [36]
On the flip side, insiders have been net sellers:
- Over the most recent quarter, insiders sold about 665,000 shares, worth roughly $225 million, including notable sales from CEO Hock Tan and other directors. [37]
Heavy institutional ownership plus insider selling doesn’t automatically mean a top is in – but it does underscore that a lot of good news is already priced in.
Valuation Check: Is AVGO Too Hot Heading Into Earnings?
Different sources paint broadly similar valuation pictures: [38]
- Market cap: around $1.8–1.9 trillion.
- Trailing P/E: about 102x.
- Forward P/E: roughly 41–45x, depending on the estimate set.
- Forward free‑cash‑flow multiple: near 47x.
Barchart’s scenario analysis suggests that if free cash flow rises to $94 billion by FY 2029 and the market assigns a more modest 30x FCF multiple, AVGO shares could still deliver ~53% upside from current levels over the next three years. [39]
However, that upside is conditional on Broadcom:
- Sustaining very high AI and networking growth,
- Successfully scaling VMware and its broader software franchise, and
- Navigating any competitive shifts if big customers like Google internalize more chip design.
In short: Broadcom is priced as if it will win big in AI. Thursday’s earnings will be judged not just on the results – but on how convincingly management supports that long‑term story.
Five Things to Watch Before the Market Opens on December 10, 2025
Here’s what traders and long‑term investors may want to keep an eye on before the bell:
- Overnight reaction in global markets and U.S. futures
Any big moves in equity futures or bond yields ahead of the Fed’s announcement can spill over into AVGO at the open, especially given its sensitivity to rates and growth sentiment. [40] - Pre‑market action in AVGO
- Watch whether AVGO holds above the $400 psychological level.
- Immediate resistance remains near the record $407–$410 zone; a strong pre‑market bid could set the stage for a breakout if the Fed is supportive.
- New analyst notes or rating changes
More firms could follow Rosenblatt and HSBC in lifting targets ahead of Thursday’s earnings. Any surprise downgrade or cautious note on valuation could weigh on the stock early. [41] - Updates on AI contracts and the Marvell/Microsoft/Amazon story
The market is watching carefully for confirmation – or pushback – on reports that Microsoft may shift more custom AI chip work to Broadcom. Any new headlines here could move AVGO independently of the broader market. [42] - Options flow and implied volatility changes
With a ±6% expected move priced in, watch whether implied volatility spikes or starts to bleed lower into the Fed decision. Big blocks of calls or puts opening in the pre‑market could hint at how institutional traders are positioning. [43]
Final Word
Broadcom heads into December 10 and 11 with:
- A stock price at record levels,
- AI revenue growing at eye‑popping rates, and
- Valuation multiples that leave very little room for disappointment.
For traders, that’s a recipe for volatility. For long‑term investors, it’s a reminder that even great businesses can have bumpy paths when expectations are sky‑high.
Nothing here is investment advice, but if you’re following AVGO, the next 48 hours – Fed on Wednesday, Broadcom’s earnings on Thursday – are likely to be some of the most important days of the year for this stock.
References
1. www.barchart.com, 2. www.investopedia.com, 3. www.barchart.com, 4. www.investopedia.com, 5. finviz.com, 6. www.investopedia.com, 7. www.benzinga.com, 8. finviz.com, 9. www.investing.com, 10. www.investing.com, 11. finviz.com, 12. www.marketbeat.com, 13. www.investopedia.com, 14. www.investopedia.com, 15. www.investopedia.com, 16. www.benzinga.com, 17. www.benzinga.com, 18. www.benzinga.com, 19. www.benzinga.com, 20. www.barchart.com, 21. www.barchart.com, 22. www.investopedia.com, 23. finviz.com, 24. finviz.com, 25. www.morningstar.com, 26. www.investopedia.com, 27. marketchameleon.com, 28. www.gurufocus.com, 29. www.tipranks.com, 30. www.gurufocus.com, 31. www.tipranks.com, 32. www.benzinga.com, 33. www.investopedia.com, 34. finviz.com, 35. www.marketbeat.com, 36. www.marketbeat.com, 37. www.marketbeat.com, 38. finviz.com, 39. www.barchart.com, 40. www.investopedia.com, 41. www.gurufocus.com, 42. www.benzinga.com, 43. www.investopedia.com
