Nvidia Just Soared on Earnings—Is Broadcom the Next AI Stock to Explode?

Nvidia Set the Bar—Can Broadcom’s Earnings Deliver a Similar AI Surge?

Nvidia (NVDA) delivered another stellar earnings report this week, sending shares sharply higher and igniting renewed enthusiasm across the AI chip sector. With investors closely watching high-growth names, attention now turns to Broadcom (AVGO), a trillion-dollar semiconductor and software powerhouse, which is scheduled to report earnings this coming week.

The AI boom continues to fuel expectations for Broadcom, particularly after Nvidia’s recent blowout results highlighted the strength of demand in data center infrastructure and AI-focused chips.

Broadcom Stock Eyes Breakout Amid Five-Week Rally

Broadcom stock (AVGO) is showing strong technical action, trading just above a key 235.28 buy point after a five-week winning streak. A mild handle-like pullback from May 14 has kept shares consolidating tightly—a positive sign ahead of earnings.

Shares recently traded around $240.75, setting up a potential breakout if earnings impress. The stock rose 8.6% on March 7, following a strong earnings report that marked the company’s third consecutive quarter of accelerating earnings growth.

Strong AI and Software Tailwinds for Broadcom

Expectations remain elevated for Broadcom’s upcoming report. According to FactSet, analysts expect the company to post $1.57 earnings per share for the quarter ended in April, representing 43% year-over-year growth. Revenue is projected to hit $15 billion, up 20% from the prior year.

Broadcom’s AI-related revenue jumped 77% year-over-year to $4.1 billion in its latest quarter. Meanwhile, the company’s software segment continues to perform strongly, thanks in large part to the VMware acquisition finalized in late 2023. Software revenue surged 47% to $6.7 billion in the January-ended quarter.

Broadcom is now firmly positioned as one of the top AI infrastructure plays, providing mission-critical solutions to hyperscalers and enterprise clients alike.

Options Strategy for Earnings Season

With the broader stock market trending higher, Broadcom is being closely watched by options traders. A basic call-option strategy can offer exposure with defined risk, especially around earnings events.

Here’s a recent trade setup: When AVGO traded at $240.75, a slightly out-of-the-money call option with a $242.50 strike price and a June 6 expiration was priced at $9.60 per share (or $960 per contract). That premium equated to 4% of the stock price, aligning with general risk guidelines for earnings-related options plays.

The break-even point for the trade would be $252.10, factoring in the premium. Importantly, the expected move, based on combined premiums of near-the-money calls and puts, suggests a 20-point swing in either direction—highlighting the potential for post-earnings volatility.

Other Earnings to Watch: CrowdStrike, Rubrik, ServiceTitan

This week also brings reports from other top-rated growth stocks in the tech and security space.

• CrowdStrike (CRWD) is set to report Tuesday after the close. The cybersecurity leader has been on a strong run since breaking above the $400 level in April. The stock is currently part of the Leaderboard model portfolio.
• Rubrik (RBRK), a newer name in the security software group, is approaching its $76.11 buy point and is expected to report Thursday after the bell. Both companies are seen as beneficiaries of the increasing demand for cloud security solutions.
• ServiceTitan (TTAN) will also report Thursday evening. Although not yet profitable, the company’s cloud-based SaaS platform for trade businesses has shown consistent revenue growth of 24–29% in recent quarters. Analysts expect a $0.40 per share loss on $208.6 million in revenue, up 22% year-over-year.

Construction Sector Spotlight: Argan (AGX)

One lesser-known name to watch is Argan (AGX), which operates in the Building-Heavy Construction industry group. AGX has been on a tear since hitting a low of $101 in March, and it continues to show signs of strong institutional support. The company is set to report Wednesday after the close.

Final Thoughts: Market Sentiment Strong into Earnings

With AI chip stocks like Nvidia and Broadcom at the forefront, investor sentiment remains bullish heading into the next round of earnings. Options trading around earnings offers a way to participate in potential upside while controlling risk—provided the trades are structured with disciplined entry points and mindful of implied volatility.

As always, investors should perform their own due diligence and recognize that options involve significant risk, especially around volatile earnings events.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.