Broadcom (AVGO) reports Q2 FY2026 results after market close on June 3, making it the final major AI infrastructure earnings event of the current cycle, the same cycle that produced Snowflake’s +36% move and Dell’s +24% move against their respective expected ranges. The options market has priced in a 9.52% expected move for the June 5 weekly expiration. What that number means, whether it is adequate given the current AI earnings backdrop, and how to think through positioning ahead of Wednesday’s print is the subject of this setup guide.
- AVGO reports Q2 FY2026 on June 3, 2026 after market close. Revenue consensus: $22.11B (+47% year over year). EPS estimate: $2.40. AI chip revenue expected at $10.7B, up 140% year over year.
- The options market has priced in a 9.52% expected move for the June 5 weekly expiration, and 12.02% for the June 18 monthly expiration. Implied volatility is currently 57.63, elevated above AVGO’s baseline as event uncertainty builds.
- SNOW and DELL each exceeded their options-implied expected ranges by more than 2x in May 2026. AVGO’s own recent history is more mixed: the last two results undershot the implied move (March 2026: +2.2% actual vs 8.1% implied; December 2025: -5.4% vs 6.3% implied).
- The put-to-call ratio on AVGO is 0.5, below the typical 0.68, indicating higher-than-usual call-side demand heading into the report.
- The three numbers that will move the stock: AI ASIC revenue vs the $10.7B estimate, non-GAAP EPS vs $2.40, and Q3 FY2026 forward guidance.
What the Options Market Has Priced In
The options market derives its expected move by pricing the at-the-money straddle for the expiration nearest the earnings date. For AVGO’s June 3 report, the at-the-money straddle for the June 5 weekly expiration implies approximately 9.52% in either direction. The June 18 monthly expiration carries a higher implied move of 12.02%, reflecting additional uncertainty about the post-earnings period.
These figures should be read as 1-standard deviation ranges. The options market is expressing that AVGO will stay within the 9.52% band approximately 68% of the time. A move beyond that range is not an anomaly: it happens roughly 32% of the time by construction. What has distinguished the 2026 AI infrastructure earnings cycle is not that the expected move was exceeded, but by how much.
Implied volatility at 57.63 reflects the elevated event premium that typically builds in the two to three weeks before an earnings release. The put-to-call ratio of 0.5 is notably below AVGO’s typical 0.68, a signal that options market participants are positioned with more calls relative to puts than usual, consistent with bullish expectations heading into the quarter.
The Quarter AVGO Needs to Deliver
Revenue consensus for Q2 FY2026 stands at $22.11 billion, up 47% year over year. AI semiconductor revenue is expected at $10.7 billion, up 140% year over year. Non-GAAP EPS consensus is $2.40, a 51% year-over-year increase.
Three line items will anchor the post-earnings trading session:
AI ASIC revenue vs the $10.7B estimate. Broadcom designs custom AI chips (application-specific integrated circuits) for hyperscaler customers including Apple, Google, and Meta. These are not general-purpose GPUs. They are purpose-built silicon for each customer’s specific AI training and inference workloads. At $10.7 billion for a single quarter, this segment is the primary driver of Broadcom’s earnings story. A miss here, even by 10-15%, would represent a $1-1.6 billion shortfall in a segment the entire analyst community is watching.
VMware integration revenue and margin. Broadcom completed the $69 billion VMware acquisition in November 2023. Q2 FY2026 represents the period when integration synergies should be reaching scale. The key metric is how effectively Broadcom has converted VMware’s legacy perpetual license customer base to subscription contracts. A faster-than-expected conversion rate is a positive surprise; slower conversion is a headwind.
Q3 FY2026 guidance. For AI infrastructure names in 2026, forward guidance has moved stocks more reliably than the actual quarterly results. DELL’s guidance raise to $157B in full-year AI server revenue and Snowflake’s $5.84B product revenue guide were the catalysts that moved those stocks beyond the expected range. The market will interpret AVGO’s Q3 guidance as the primary signal for whether hyperscaler AI capex remains on an upward trajectory.
How AVGO’s Pattern Compares to SNOW and DELL
The same two-week window that produced Snowflake’s +36% post-earnings move and Dell’s +24% move closed with both names exceeding their options-implied ranges by more than 2.5 times. Both moves were driven by single binary catalysts that analyst models had not adequately captured: SNOW’s $6B AWS partnership, and DELL’s AI server revenue growing 757% year over year on a $24.4B backlog of new AI orders.
Broadcom’s earnings structure is meaningfully different. It is not a single-catalyst story. AI ASIC revenue is the headline, but VMware integration, infrastructure software, and networking all contribute to the final number. More components can mean more diversified surprise potential: a miss in VMware can be partially offset by an AI beat, producing a smaller net surprise than a single-segment binary event like SNOW or DELL.
AVGO’s own recent earnings record supports this read. Of the last eight earnings releases, four exceeded the implied expected move and four fell within it, approximately even. The two most recent prints undershot: March 2026 produced a +2.2% actual move against an 8.1% implied range, and December 2025 produced a -5.4% move against a 6.3% implied range. Both prints were beats on the numbers but without the guidance acceleration that the market needed to force a move beyond the expected range.
The honest framing for options traders is this: the AI earnings precedent from SNOW and DELL this week warrants extra caution for premium sellers, but AVGO’s own history does not guarantee a repeat of those outsized moves. The 9.52% expected move is not obviously mispriced in the same way SNOW’s 13.5% was before a $6B surprise partnership announcement.
Strategy Considerations: How Each Side Looks
The following examples are hypothetical and illustrative only. They are not trade recommendations. Actual fills, commissions, and margin requirements will vary.
Short Straddle and Short Strangle (Premium Sellers)
A trader who sells a short straddle at-the-money collects the full straddle premium as maximum profit if AVGO closes near the strike at expiration. The trade is profitable within approximately the 9.52% expected range in either direction.
The structural risk: AVGO’s AI chip segment is large enough that a significant miss or beat on $10.7B creates a move with the same potential as a SNOW or DELL-style binary surprise. Short straddle sellers on AI infrastructure names in this cycle have faced outcomes where the actual realized volatility exceeded 2x the priced-in expected range. An iron condor with short wings set at the 9.52% expected move level has defined risk, but max loss is realized if AVGO moves 12-15% as it approached in both directions in the last two quarters.
Long Straddle and Long Strangle (Premium Buyers)
A trader who buys a straddle at current IV levels needs AVGO to move more than the total premium paid to profit, after accounting for IV crush. The advantage is defined maximum loss and unlimited upside if AVGO follows the SNOW and DELL pattern.
The structural risk is IV crush. Even on a large directional move, the extrinsic portion of in-the-money options collapses rapidly after the announcement. Long straddle buyers who hold past the opening session absorb significantly more IV decay. For reference, AVGO IV at 57.63 going in can compress to 30-35 post-announcement, which represents a meaningful drag on extrinsic value that the directional move must overcome.
| Strategy | Max Profit | Breakeven Condition | Primary Risk |
|---|---|---|---|
| Short straddle (ATM) | Premium collected | Stock stays within ~9.5% | Large directional move beyond expected range |
| Iron condor (wings at 9.5%) | Net credit | Stock stays within wing range | Stock breaks through either wing; defined max loss |
| Long straddle (ATM) | Unlimited (directional) | Stock moves more than premium paid | Small move plus full IV crush |
| Directional call or put (OTM) | Large if move exceeds strike | Large directional move beyond strike | Wrong direction or move smaller than premium paid; IV crush |
The IV Crush Timeline
For options traders who are long premium going into June 3, timing matters as much as direction. IV crush begins immediately after the announcement, even before regular trading opens on June 4. The longer a long option position is held after the earnings release, the more IV compression offsets any directional gain.
The standard guidance for post-earnings long options: if the stock moves significantly in your direction, close the position in the after-hours window or at the open on June 4 before IV fully normalizes. Each hour of delay reduces the extrinsic value in the position regardless of whether the stock continues to move.
For short premium positions that move against you: the first 30 minutes of the post-announcement session typically see the most violent IV and price movement. Decisions made under those conditions are more likely to be reactive than strategic.
Bottom Line
Broadcom’s Q2 FY2026 report is the most watched remaining AI earnings event in the current cycle, and the options market has priced in a 9.52% expected move for the weekly expiration. The SNOW and DELL results from the same week are the relevant precedent for premium sellers: both AI names exceeded their implied ranges by more than 2x. But AVGO’s own recent history, with two consecutive undershoots on solid-but-not-transformative quarterly results, suggests the 9.52% may be reasonably priced absent a transformative guidance surprise. Wednesday night will clarify which pattern holds.
Frequently Asked Questions
Q: When does Broadcom report Q2 FY2026 earnings?
A: Broadcom (AVGO) reports Q2 FY2026 results after market close on June 3, 2026. The June 5 weekly options expiration is the standard instrument for earnings plays tied to this announcement date.
Q: What is the options-implied expected move for AVGO?
A: The options market has priced in approximately 9.52% for the June 5 weekly expiration and 12.02% for the June 18 monthly expiration, based on at-the-money straddle pricing. These are 1-standard deviation ranges, meaning the market assigns approximately 68% probability to the stock staying within the band in either direction.
Q: What are Wall Street’s estimates for AVGO Q2 FY2026?
A: Revenue consensus is approximately $22.11 billion, up 47% year over year. Non-GAAP EPS estimate is $2.40, up approximately 51% year over year. AI semiconductor revenue is expected to reach $10.7 billion, up 140% year over year.
Q: Should AVGO be expected to exceed the implied move like SNOW and DELL did?
A: Not necessarily. SNOW and DELL each had a single dominant binary catalyst that analyst models had not priced: SNOW’s $6B AWS deal and DELL’s $24.4B AI server order backlog. AVGO has a more complex earnings structure with AI ASIC revenue, VMware integration, and multiple other segments. Its own recent earnings history shows two consecutive undershoots on solid results. Whether a guidance surprise on AI ASIC revenue is large enough to force a 2x-3x move beyond 9.52% is not predictable from options data alone.
Q: Which brokers are suited for options strategies around AVGO earnings?
A: For multi-leg options strategies around earnings events, tastytrade provides purpose-built analytics including an expected move display, fast multi-leg order entry, and $1.00 per contract to open with $0.00 to close (as of last_verified 2026-03-28, check current terms). Interactive Brokers offers Risk Navigator for portfolio-level Greek monitoring and $0.65 per contract both ways (as of last_verified 2026-03-31, check current terms), with full pre-earnings options analytics through the Trader Workstation platform. See our Snowflake Q1 FY2027 recap and Dell Q1 FY2027 recap for post-earnings case studies from the same AI earnings cycle.