Why I’m buying the dip on Broadcom (AVGO) before Google (GOOG) earnings.

TL;DR: Everyone is buying Google (GOOGL) calls hoping for a pop. I’m betting on Google’s spending. AVGO dropped -6% today on zero news due to sector rotation. I’m loading up on June 2026 Calls to catch the rebound when Google announces massive AI infrastructure spending tomorrow.

**The Context**

Broadcom (AVGO) took a beating today, dropping from \~$338 pre-market to close at \~$320 (-6%). There was no bad news. No lost contracts. No analyst downgrades.

This was a classic liquidity rotation. Funds sold to chase Google before earnings. The stock is now oversold and sitting on major support.

**The Thesis: The "CapEx" Print**

I don’t care if Google beats or misses on EPS tomorrow night. I care about one specific line in their report: Capital Expenditures (CapEx).

1. The AI Arms Race: Google is fighting for its life against Microsoft/OpenAI. They cannot afford to slow down infrastructure spending. They have to build data centers and deploy TPUs (Tensor Processing Units) aggressively.

2. The Monopoly: Broadcom is the exclusive partner for Google’s custom TPUs. You cannot scale Google Cloud AI without Broadcom silicon.

3. The Setup: If Google announces they are increasing or maintaining high CapEx for AI (which they almost certainly will), Broadcom is the direct beneficiary.

**Why AVGO instead of GOOGL?**

If you buy Google calls for tomorrow, you are fighting Vega (IV Crush). Even if Google pops, the volatility drop might eat your profits.

By playing Broadcom:

• You avoid the earnings IV crush (AVGO doesn't report tomorrow).

• You get a "sympathy play" that is currently trading at a 6% discount after today's flush.

• The "Spring" is loaded: Today’s drop to $310 flushed out the paper hands. The close at $320 suggests the bottom is in.

**The Position**

• Ticker: AVGO

• Expiry: June 18, 2026

• Strike: $365

• Logic: I’m giving the stock 4 months to run, but I expect a sharp rebound this week if the CapEx numbers are good. If Google spends, AVGO goes to $350+ fast.

**Bear Case / Risks**

• Google announces a surprise cut in CapEx (highly unlikely given the AI war).

• General market sell-off drags everything down further.

• Support at $300 needs to hold.

**Summary**

The market gave us a -6% entry point on a blue-chip AI infrastructure stock one day before its biggest customer announces their budget. I’m taking the bet.

Positions: Long 2600+ warrant contracts, June 2026.