Broadcom has clawed back from last week's $370 close to $386.50, yet the short sellers who built positions into the summer highs show no sign of exiting — the fourth chapter of a pattern that has defined this stock since June.
The price recovery is real but fragile. Tuesday's 2.2% gain brought AVGO back to $386.50, a level it has traded around multiple times since the earnings collapse from $479. The stock is still down 6% on the month, and this week's net move is barely negative at -0.7%. More importantly, the $395–$411 resistance band flagged in prior reports has not been tested again — the bounce ran out of steam before getting there. Semiconductor peers had a stronger Tuesday: MRVL gained 6.7% and CEVA added 9.1%, both outpacing AVGO on the day. That relative underperformance against correlated names is worth noting.
Short interest has barely moved. At 70.6 million shares — 1.49% of the free float — it remains at the elevated plateau established in early July, more than 30% above the 1.10%–1.16% range that prevailed through most of June. The positioning has been essentially unchanged for ten consecutive sessions now. Bears added into the surge, held through the $401 peak, held through the pullback to $370, and are still holding into this bounce. The borrow market offers them zero friction: availability is fully unconstrained, with over 3.2 billion shares lendable, and cost to borrow at 0.33% is among the lowest readings of the past six weeks. There is no squeeze pressure, no short covering forced by borrow conditions, and options are similarly quiet — the put/call ratio of 1.05 sits fractionally below its 20-day average of 1.06, a negligible deviation in either direction.
The Street remains constructive in aggregate but is carrying targets that look optimistic at current levels. The consensus mean target is $525, implying around 36% upside from here — a gap that has been in place since the post-earnings analyst reset in early June, when JPMorgan raised its target to $580, BofA lifted to $530, and several other houses followed with upgrades in the $500–$550 range. The sole downgrade since then came from Erste Group on July 7, moving to Hold from Buy. The bull thesis centres on AI ASIC leadership, networking silicon demand, and the recurring VMware software revenue base. The bear case flags guidance disappointment — last earnings brought a double-digit sell-off — plus China exposure, customer concentration near 30% of revenues, and the simple observation that the stock has failed every attempt to recover its pre-earnings level. The ORTEX short score at 31.1 is steady near a six-month high, with quality metrics (Piotroski F-score of 8, FCF/sales of 36%) providing the floor under that reading, while price momentum has been the drag since June.
Insider activity deserves a line. Chief Legal Officer Mark Brazeal sold 25,000 shares on July 10 at $401 — the third 25,000-share block he has sold this summer, each executed near a local high. Chairman Henry Samueli sold roughly 97,000 shares on June 24 across multiple tranches. Net insider activity over the past 90 days is technically positive at roughly 730,000 shares, but that figure is distorted by exercise-related mechanics; the directional reads from the discretionary block sales are consistently toward the exit at prices above $377.
September 3 brings the next earnings event, and the two most recent prints produced next-day moves of -13% and -19.5% respectively. The question heading into that date — whether AVGO can establish a higher base in the $380–$395 range or continues to fail at the same resistance — is what the short sellers' patience will ultimately be tested against.
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