TLDR
- Mizuho analyst Jordan Klein is bullish on Broadcom ahead of its September 2 earnings, calling the selloff a contrarian buy opportunity at around $370
- Broadcom has not posted back-to-back down earnings reactions in nearly 30 quarters, roughly seven years
- The main bear case is that Google’s in-house ASIC chip development will cut into Broadcom’s hyperscaler revenue
- Cathie Wood’s ARK Invest bought about $20.6 million of Broadcom stock while selling roughly $18.2 million of AMD
- Broadcom historically moves 2 to 3 times more than NVIDIA following earnings, making the September 2 print a high-stakes event
Broadcom stock has dropped mid-teens over the past two weeks, and Mizuho TMT Sector Specialist Jordan Klein thinks that selloff has created an opening. With earnings due September 2, he is flagging what he sees as an asymmetric setup around $370.
The core of his argument is sentiment. Klein says the positioning on AVGO right now is the “total opposite” of where it stood 90 days ago, when the stock headed into early June earnings with strong momentum and then fell around 12% in a single day after a soft guide.
The bear case weighing on the stock right now centers on Google. Investors are worried that Alphabet’s push to develop its own custom application-specific integrated circuits will erode Broadcom’s revenue from hyperscaler clients.
Klein is not dismissing that risk, but he thinks the market has already priced it in and then some. His view is that consensus has hit maximum pessimism, which is often where the setup flips.
Hock Tan’s Track Record
A big part of Klein’s thesis is historical. He points out that CEO Hock Tan has not posted back-to-back down earnings reactions in nearly 30 quarters, roughly seven full years.
Klein also notes competitive pressure as a factor. Both NVIDIA and Marvell Technology recently used their own earnings calls to talk up acceleration in future revenue growth. Klein argues Tan is unlikely to sit back and let those narratives dominate.
“No way he sits by and lets the shorts manhandle his stock,” Klein wrote in Mizuho’s note. His expectation is that management goes out of its way to address the Google share-loss concern directly with bullish forward projections for 2027 and 2028.
Klein is not calling for a 25% spike. His view is simply that the risk-reward at $370 favors more upside than downside over a six-month-plus horizon. NVIDIA remains Mizuho’s top semiconductor pick, with Broadcom framed as a secondary opportunity.
Cathie Wood Adds to Broadcom
ARK Invest added to its Broadcom position on Wednesday, buying roughly 57,705 shares across multiple ETFs for about $20.6 million. At the same time, ARK sold approximately 37,977 AMD shares for roughly $18.2 million across four ETFs.
That AMD reduction followed another trim earlier in the week, pointing to a continued shift in ARK’s AI-chip exposure.
ARK also picked up about $12.8 million in Cerebras stock and around $13.3 million in Cloudflare on the same day.
One dynamic that raises the stakes on September 2 is Broadcom’s historical earnings volatility. Mizuho notes AVGO tends to move 2 to 3 times more than NVIDIA following its results, in either direction.
Investors will be watching for two things from Tan: any clarity on the Google ASIC relationship going forward, and specific revenue projections for fiscal 2027 and 2028 AI opportunities.
Mizuho did not disclose a formal price target or official rating on AVGO in this note.
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