Broadcom Q2 Earnings Preview: Will AI Demand, Guidance Fuel the Next Leg Higher?

Broadcom (NASDAQ:) Inc. is likely to show robust growth driven by demand for AI-related hardware. The company is set to report earnings on Thursday after the market closes. Analysts anticipate a 20% increase in sales, reaching $15 billion, along with a 43% rise in earnings per share (EPS), which is expected to be $1.57. Investor focus will be on custom AI chip business.

Key Highlights

• Broadcom’s custom ASIC business is expected to grow 35% year-over-year to $10.6 billion in fiscal year 2025.
• Expansion into new AI customers, such as potentially including Apple (NASDAQ:) and OpenAI, could significantly broaden Broadcom’s addressable market. This growth in the customer base may lead to increased future revenue, as these high-profile clients could drive higher demand for Broadcom’s AI chips and related technologies.
• Broadcom’s capability to offer interchangeable XPUs (accelerator processing units) that can replace GPUs in AI processing provides a notable competitive advantage.
• Increased competition in the AI chip market could put downward pressure on prices and pose challenges for Broadcom in maintaining its market share. Additionally, since a sizable portion of Broadcom’s AI revenue relies on a few large customers, there is a risk if these customers reduce their orders or choose to switch to other suppliers.

Source: InvestingPro

AVGO Q2 2025 earnings after market Thursday June 05, 2025

Option Statistics

Put/Call ratio suggests the following three scenarios:

• With Put/Call ratio between 1.1614 to 0.5908 for the next four upcoming expiries, suggest that the overall option traders are spread between Puts and Calls, heavy on Put in June 06 expiry.
• Lower earnings and guidance could trigger a sharp sell-off.
• Better than expected earnings and guidance would trigger a gradual rise. If the guidance is exceptionally better, then AVGO will witness a sharp short-lived rally.
• Option market is showing a large net positive Gamma at 272.50 strike versus net negative gamma exposure at 200 strike over the spectrum of June 2025 to December 2027.

Technical Analysis Perspective

• AVGO appears to be in an extreme bullish mode rising along with a sharp 45-degree angle trendline from 138 low in April ’25.
• Such rise is pointing at more upside room as long as 252 – 234 support bands remain intact post earnings.
• The upside target above this support band is somewhere between 282 – 295 area.
• A sharp and sustained move below 234 would damage the bullish sentiments.

Weekly Candlestick Chart

AVGO Seasonality Chart

AVGO closes 3.7% higher in June 69% of the time since 2009. Though May is the best performing month historically. Stock is trading above 3.7% of the month of June opening price which is around 252.

***

Whether you’re a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop.

Subscribe now and instantly unlock access to several market-beating features, including:

Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters (NYSE:), Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.

He is the founder of TwT Learnings, provides financial market training.