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Broadcom Options Volume Jumps Seven-Fold as Shares Hit All-Time High

$Broadcom(AVGO)$   options volume jumped more than seven-fold, allowing the company to join its biggest rival $NVIDIA(NVDA)$  , electric vehicle giant $Tesla Motors(TSLA)$   and $Opendoor Technologies Inc(OPEN)$   in the most active stock options Friday. 

That comes as shares climbed as much as 16.4% to an intraday all-time high of $356.34, buoyed by brightening outlook and better-than-expected financial results. Gains of more than $30 pushed a number of call options in the money, boosting their appeal to speculators seeking to profit from zero-days-to-expiration (0DTE) options just hours before the contracts expire. 

Options volume advanced after the CEO Hock E. Tan said the company secured more than $10 billion of orders of custom chips for artificial intelligence, as Broadcom continued to gain market share. That unnamed customer is likely OpenAI, according to JPMorgan analysts. 

Backlog reached a record $110 billion, with bookings “extremely strong” amid robust demand from AI, Tan said. “We now expect the outlook for fiscal 2026 AI revenue to improve significantly from what we had indicated last quarter,” he said.  

About 1.43 million Broadcom call and put options changed hands, up from 465,200 a day earlier. The latest figure is more than seven times the 20-day average of 189,980 contracts, according to data compiled by Bloomberg. 

More than half of Friday's volume so far were in 0DTE, contracts that expired by the time the market closed for the day. Call options that give their holders the right to buy the stock at $340 by the end of the trading day attracted the heaviest volume after the stock climbed above that strike price before paring gains. 

Broadcom forecast AI semiconductor revenue to climb 66% to $6.2 billion in its fiscal fourth quarter from a year ago, Tan said in the company’s earnings call Thursday night. That outlook is higher than the $5.82 billion that analysts were expecting and an acceleration from the 63% growth to $5.2 billion for its fiscal third quarter ended Aug. 3. 

"This performance puts Broadcom on track to drive ~$20B in AI revenues for FY25,” JPMorgan analysts including Harlan Sur wrote in a note to clients Friday. The analysts boosted their price target for the stock to $400, from $325, while maintaining its rating at overweight.

Apart from its latest order, “demand for custom AI accelerators from our three customers continued to grow as each of them journeys at their own pace towards compute self-sufficiency,” he said.

Total revenue for its fiscal third quarter climbed 22% to $15.95 billion, surpassing analysts’ expectations for a third straight quarter. Adjusted earnings rose 45 cents to $1.69 a share, beating the $1.67 a share expected by analysts, according to the average of estimates compiled by Bloomberg. 

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