The Street raised targets on AVGO just six days ago. The stock has fallen another 4% since. That gap — between analyst conviction and market price action — is the defining tension in Broadcom right now.
Following the June 4 post-earnings collapse, ten analysts revised targets on the same day. Most went higher. JP Morgan's Harlan Sur lifted his target to $580. Jefferies and Truist both moved to $550. B of A Securities raised to $530. Only Macquarie moved against the grain, downgrading to Neutral with a $437 target. The mean consensus now sits at $522. The stock closed Monday at $392.16 — implying 33% upside to the consensus mean.
Bulls point to AI infrastructure demand and secured supply arrangements. Broadcom's EPS momentum rank sits at the 66th percentile over 30 days and 77th over 90 days. The analyst recommendation differential ranks at the 92nd percentile. That combination — strong estimate revisions, widespread Buy ratings, heavy institutional ownership — describes a stock the market is re-rating downward despite the fundamentals.
The bear case is more structural. Google's reported move to diversify its AI chip suppliers away from Broadcom is the central threat. If the AI customer base concentrates less than the market assumed, the valuation premium compresses. The PE multiple has already contracted by 7.3 points over the past week alone, now sitting at 26.1x.
The put/call ratio hit 0.99 on June 8 — 3.2 standard deviations below its 20-day mean of 1.12 — flagging a burst of call buying at the lows. By June 9 the ratio had recovered to 1.13, back in line with the 20-day average. The options market absorbed the move quickly. That's consistent with the borrow market's indifference: availability remains entirely unconstrained, and cost to borrow is just 0.34% despite a 58% weekly rise.
Short interest rose 10.8% in a single session to 1.23% of free float on June 9 — the highest since early May. That is worth noting, but not overstating. At 1.23%, the short base is still tiny relative to Broadcom's scale. The borrow pool has 4.7 billion shares available. This is not a short-driven story.
The real question is whether the analyst consensus at $522 gets maintained through the summer. Next earnings are not until September 3. Between now and then, any signal from Google about supplier diversification is the single biggest variable the bull case faces. The Street's conviction is clear. The market's scepticism, at $392, is equally clear.
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