Investing.com — Broadcom (NASDAQ: AVGO) is down mid-teens over the past two weeks, but that selloff is exactly what has Mizuho TMT Sector Specialist Jordan Klein calling for a contrarian entry ahead of the company’s September 2 fiscal earnings release.
Klein’s bullish thesis rests on a convergence of deeply negative sentiment, a near-unbroken historical earnings track record, and an expectation that CEO Hock Tan will directly confront the dominant bear narrative on the call. Broadcom is the most direct publicly traded expression of the custom ASIC AI chip debate — the market’s current verdict on whether Google’s in-house chip development will erode AVGO’s hyperscaler revenue is weighing visibly on the stock.
“I REALLY LIKE AVGO INTO SEP 2 EARNINGS DATE (gulp!). There, I said it. Many will think I am nuts or tell me how screwed AVGO will be into next yr onward as they bleed share at GOOG. But sentiment could not be worse,” Klein wrote, according to Mizuho’s note.
The bear case, as Klein characterizes the consensus view, is that Broadcom faces structural share losses to Google in custom application-specific integrated circuits. That fear has driven the stock lower every session and produced what Klein describes as positioning that is the “total opposite” of 90 days ago, when AVGO headed into its early June earnings with strong momentum — only to see the stock fall approximately 12% in a single day after a soft guide.
Klein’s counter-argument leans heavily on Hock Tan’s post-earnings track record. “CEO Hock Tan NEVER HAS TWO DUD QTRS IN A ROW. It has been 7 full yrs since AVGO stock traded down post back-to-back earnings. That is nearly 30 qtrs ago,” Klein wrote, per Mizuho. That historical pattern, combined with the severity of the current drawdown, forms the core of the asymmetric setup Klein is flagging at around $370.
The Mizuho analyst also points to competitive pressure on Tan as a catalyst for a proactive management response. Both NVIDIA (NASDAQ: NVDA) and Marvell Technology (NASDAQ: MRVL) recently used their own earnings calls to highlight acceleration in out-year revenue growth, according to Klein. “CEO Hock Tan just heard his biggest comps in both NVDA and MRVL talk up their forward rev growth in out-years, calling for ACCELERATION. No way he sits by and lets the shorts manhandle his stock,” Klein wrote, per Mizuho.
Klein’s expectation is that Broadcom management moves decisively to neutralize the Google share-loss narrative. “My view is Hock and team go OUT OF THEIR WAY TO CALM INVESTOR FEARS AROUND share losses at GOOG with bullish growth projections and details on ’27/’28 AI rev opps,” he wrote, according to Mizuho. The note does not provide specific revenue figures for those years.
