AVGO has delivered its Q2 print and broken above the analyst target cluster that defined the pre-earnings setup — the question now is whether the Street chases the stock higher or whether consensus begins to look stretched at current levels.
The Q2 earnings reaction confirmed what the pre-print positioning implied: no squeeze, no defensive hedging, just genuine re-rating on fundamentals. Broadcom closed at $479.23 on June 3, up 13.6% on the week, carrying it above Morgan Stanley's $485 target and within reach of the $490 marks set by Susquehanna and UBS. Wells Fargo's $545 target — the outlier when it was set — now reads less like an outlier. The mean consensus has moved to $489, leaving roughly 2% implied upside from Wednesday's close. That gap is narrow. The print cleared the bar the Street set; the next question is whether the bar gets raised.
The positioning data tells the same uncluttered story it has throughout this earnings cycle. Short interest has continued drifting lower — now 1.1% of free float, down another 2.3% on the week and 4.1% on the month. Borrow availability remains entirely unconstrained; the lending pool is effectively unlimited. Cost to borrow is just 0.21%, near its lowest level of the past six weeks. Options have also relaxed: the put/call ratio has eased to 1.09, slightly below its 20-day average of 1.13 and around 1.4 standard deviations below that mean. None of these signals point to a market hedging against further moves in either direction. This remains a stock without a credible short thesis.
The bull-bear debate has narrowed considerably post-print. Bulls point to Broadcom's AI networking silicon and infrastructure software franchises as durable, multi-year compounders, with strategic partnerships — Google and Anthropic — providing long-cycle revenue visibility that most semiconductor peers lack. Bears flag the valuation: the P/E has expanded to 33.5x and price-to-book to 17x, with EV/EBITDA at 26.4x. The EPS momentum factor scores reasonably at the 56th percentile on a 30-day basis and 75th on a 90-day view — constructive, but not blowout. The analyst recommendation differential ranks in the 91st percentile, meaning the Street is more uniformly positive on Broadcom than almost any other name in the universe. That unanimity is itself a risk: there is little analytical dissent left to convert into fresh buying.
Among correlated peers, the gap in day-one post-earnings reactions is notable. MRVL surged 32.5% on the day and 39.6% on the week — a dramatically larger move than Broadcom's own 13.6% weekly gain — while ALAB added 11.1% and ONTO rose 8.7%. That peer strength suggests the AI infrastructure trade is broadly re-rating, not just a Broadcom-specific event. It also raises the question of whether AVGO's more measured reaction reflects its larger base or simply that Broadcom's fundamentals were more thoroughly pre-priced.
The earnings print has been delivered and digested. What the Q3 guide — and the pace of analyst target revisions in the days ahead — will test is whether Broadcom's AI revenue trajectory justifies a valuation that now leaves the consensus with barely 2% headline upside.
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