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Broadcom slide puts AVGO leveraged and bear ETFs in focus
Broadcom shares fell nearly 6% after reports of a VMware vCenter Syslog Server security vulnerability, putting an AVGO bear ETF and an AVGO bull 2X ETF on traders' radar.
ETF Trends highlighted the sharp selloff in Broadcom, noting shares dipped nearly 6% after reports of a security vulnerability tied to the company’s VMware vCenter Syslog Server. The outlet also pointed to broader worries about the state of the AI funding market as additional pressure on the stock.
With the move leaving Broadcom 20.6% below its 52-week high, ETF Trends said the Direxion Daily AVGO Bear 1X Shares could be the easier trade for short-term bearish positioning among single-stock ETFs. At the same time, the outlet cautioned that risk-aware traders should not dismiss the Direxion Daily AVGO Bull 2X ETF, which is designed to target 200% of the stock’s daily performance.
ETF Trends cited Morningstar analyst William Kerwin, who argued Broadcom remains well positioned in custom artificial intelligence accelerators and benefits from hyperscale cloud vendors building chips to reduce reliance on Nvidia. The article also said large-scale acquisitions are not expected to be on Broadcom’s near-term radar.
The piece added that VMware, acquired by Broadcom in 2023, continues to provide a non-AI revenue stream, particularly for enterprise customers, even though the outlet said AI is likely to remain the primary catalyst for Broadcom’s results and the leveraged ETFs tied to the shares.