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The best stock recommendation I ever got was at an investors' meetup in San Francisco about a decade ago. At the time I was infatuated with a stock called Ambarella (AMBA) which provided the chips for GoPro (GPRO) – which was all the rage at the time. My friend – much savvier about tech than me – recommended chip maker Broadcom (AVGO) instead. Had I taken his advice, I – and my clients – would be much wealthier.
AVGO stock has been a juggernaut since then though it’s not talked about much despite being one of the largest stocks in the world with a market cap of ~$350 billion. Now AVGO has gotten caught up in the AI hype surrounding NVDA and there is a lot of speculation around the stock heading into this afternoon's earnings report. Note the huge up days on a massive volume of late.
While I am by no means a bear on AVGO, I’m going to run it twice and sell far out of the money naked calls on it – just like I did successfully with Salesforce (CRM) yesterday. I like the AVGO $865 June 2 Calls which can currently be sold for ~$16. That means AVGO would have to trade above $881 tomorrow after the earnings report for this trade to be a loser.
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