Broadcom's $1.4 Trillion Test: Double Your Bet or Hedge Before September 4

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Broadcom Inc. (AVGO) reports fiscal Q3 2025 earnings on September 4th after market close, with traders watching whether the AI infrastructure leader can justify its $1.4 trillion valuation. The semiconductor and software giant faces high expectations after joining tech's most exclusive club.

AVGO shares have skyrocketed 81% over the past year, crushing the S&P 500's 15% return. This outperformance reflects Broadcom's strategic positioning in AI infrastructure and data center markets, though questions persist about maintaining momentum.

For active traders looking to capitalize on Broadcom's typically volatile earnings moves, Direxion's Single Stock Daily Leveraged & Inverse ETFs, launched in October 2024, provide tactical tools to trade the semiconductor leader's price swings without traditional margin requirements.

Q3 Earnings Expectations

Wall Street expects Broadcom to report $1.35 per share in fiscal Q3 earnings, up 32.4% from the $1.02 posted in the same quarter last year. This growth reflects continued strength in AI accelerators and enterprise software.

The company has topped earnings estimates in three of the past four quarters, though it missed slightly in Q2 when it reported $1.58 per share versus expectations of $1.60. That 1.5% miss came despite revenue beating forecasts, highlighting investor sensitivity to any signs of deceleration.

For fiscal 2025, analysts project earnings of $5.48 per share, representing 48% growth from fiscal 2024's $3.71. Looking ahead to fiscal 2026, estimates call for $7.05 in earnings per share, suggesting 29% growth as comparisons get tougher.

Recent Rally and Analyst Enthusiasm

Broadcom currently trades around $300, near its all-time high of $317.35. The stock has seen significant gains in the past year, driven by AI infrastructure demand and successful integration of VMware, its massive $69 billion acquisition.

Analyst sentiment remains overwhelmingly bullish, with 36 analysts covering the stock. The breakdown shows 32 "Strong Buy" ratings, 1 "Moderate Buy," and just 3 "Hold" recommendations. The average price target of $299.34 actually sits slightly below current levels, suggesting some near-term caution.

Market watchers highlight several catalysts, including AI accelerator ramp-up and VMware synergies. However, the Q2 guidance disappointment that triggered a 5% selloff shows investors demand perfection at these valuations.

Key Factors for Q3 Results

Several elements will drive the stock's reaction when Broadcom reports:

• AI Infrastructure Growth: Custom AI chip momentum and hyperscaler spending patterns are crucial for the growth narrative.
• VMware Integration: Progress on the $69 billion acquisition's synergies and contribution to software revenue matters.
• Networking Strength: Data center networking demand amid AI buildouts supports the infrastructure story.
• Margin Expansion: Ability to expand margins while scaling AI products validates the business model.
• Customer Diversification: Updates on customer concentration and new AI chip wins beyond top hyperscalers.
• Forward Guidance: Q4 outlook and commentary on 2026 will set expectations for sustained growth.

Trading AVGO Earnings With Leveraged & Inverse ETFs

AVGO typically sees increased volatility in its share price surrounding its earnings releases, creating significant opportunities for positioned traders. Direxion's Single Stock Daily Leveraged & Inverse ETFs let traders amplify or hedge AVGO's price action.

Bullish Trades: AVL

Direxion Daily AVGO Bull 2X Shares (AVL) allows traders to double their exposure to potential Broadcom gains. AVL seeks 200% of AVGO's daily performance, before fees and expenses, through financial instruments.

• Targets 200% of AVGO's daily performance
  • When Broadcom rises 1%, AVL aims for a 2% gain (before fees)
  • When Broadcom falls 1%, AVL typically drops 2% (before fees)
• Perfect for traders expecting blowout AI infrastructure results or raised guidance
• Semiconductor earnings often produce outsized moves on AI commentary
• Average daily volume: 206,000 shares
• Designed for active traders monitoring positions throughout the day

Bearish Trades: AVS

Direxion Daily AVGO Bear 1X Shares (AVS) provides inverse exposure to Broadcom without requiring short-selling*. This feature helps traders in retirement accounts where IRA and 401(k) rules prohibit traditional shorting.

• Seeks inverse (-1X) daily performance versus AVGO
  • When Broadcom drops 1%, AVS aims for a 1% gain (before fees)
  • When Broadcom rises 1%, AVS typically falls 1% (before fees)
• Valuable for traders worried about valuation concerns or guidance disappointment
• Allows retirement account holders to make bearish trades on AVGO
• Average daily volume: 66,500 shares

Both AVL and AVS reset their exposure daily and work best as short-term trading tools rather than buy-and-hold investments. These products require active oversight and are designed for traders who understand leverage & inverse effects and daily rebalancing dynamics.

With Broadcom at nosebleed valuations but AI infrastructure demand still accelerating, these leveraged ETFs provide timely tools to capitalize on whatever direction the stock takes on September 4th.

*Short-selling means borrowing shares to sell them, hoping to repurchase at lower prices later.

To learn more about all Direxion's Single Stock Leveraged and Inverse ETFS, Click Here

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in AVGO.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing.  A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares.  To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com.  A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with AVGO and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with AVGO and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to AVGO is impacted by AVGO’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to AVGO at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to AVGO increases on days when AVGO is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with AVGO and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to AVGO is impacted by AVGO’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to AVGO at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to AVGO increases on days when AVGO is volatile near the close of the trading day.

Broadcom Inc. – AVGO faces risks associated with: the highly competitive nature of the semiconductor industry; failure to realize expected benefits from mergers, acquisitions and other joint ventures; economic and market uncertainty; reduced demand for its products; potential concentration of revenues in a few large clients; geopolitical and economic events and pandemics; among other risks.

Semiconductor Industry Risk – Semiconductor companies may face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources or personnel and may face risks related to the availability of materials.

Technology Sector Risk — The market prices of technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily AVGO Bear 1X Shares, Shorting or Inverse Risk.  Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

Distributor: ALPS Distributors, Inc.

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