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Luke Kawa

JPMorgan recommends options bet on Broadcom upside ahead of earnings

Broadcom, the Robin to Nvidia’s Batman, is poised to release its third-quarter earnings after the market closes today. Heading into the report, there’s an appealing setup for a short-term options punt, according to JPMorgan equity derivatives strategist Bram Kaplan.

Broadcom’s one-month call skew — in particular, the difference in the implied volatility between call options 5% versus 10% above its current price — is relatively flat, per Kaplan. This makes buying the closer-to-the-money call while selling the more out-of-the-money options a relatively cheaper and more efficient way to express an optimistic view on the stock. And with the options-implied earnings move (6.2%) well shy of what’s been realized over the past four quarters (12.1%) and below the three-year average (7.4%), a derivates bet encompassing earnings doesn’t appear to demand a very expensive premium, he noted.

JPMorgan’s recommended trade:

  • Buy AVGO 5Sep25 320-330 call spreads for $1.80

Kaplan flagged that JPMorgan analysts covering the stock consider Broadcom their top pick in the semiconductor space, and a better outlook for sales and guidance than consensus heading into earnings.

The Street is looking for Broadcom to report revenues upward of $15.8 billion and adjusted diluted earnings per share of $1.67. Analysts expect the company’s sales guidance for Q4 to be north of $17 billion.

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SpaceX received more than a dozen positive analyst calls on Tuesday — including from major Wall Street banks — as they initiate coverage on Elon Musk’s space and AI company.

SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

Still, SpaceX fell more than 5% on Tuesday amid a broader sell-off, and is currently effectively flat from its opening price of $150 a share.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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