Investors have again dumped tech stocks despite Broadcom delivering solid results. Broadcom’s shares fell over 11% as concerns about thinner margins and uncertain deals weighed on the stock, dragging other AI-focused names like Nvidia, AMD, and Oracle lower and pushing major U.S. benchmarks down for the week.
Across the market, the week told a similar story: the Dow rose about 1.1% on strength in financials, but the tech sector pulled the S&P 500 and the Nasdaq lower, with declines of roughly 0.6% and 1.6%, respectively. The move fed into chatter about an AI bubble, with investors nervous about any hint of bad news, even though Broadcom’s earnings and forward guidance easily topped expectations.
As Bernstein’s Stacy Rasgon, who maintains a Buy rating on Broadcom, put it in a Friday note, the company’s AI story continues to overdeliver and do so at an accelerated pace. UBS, meanwhile, remains optimistic about 2026, predicting high profitability and a growing impact from AI, power and resources, and related longevity themes.
In the near term, sentiment could stay skittish unless a clear positive signal emerges—such as Oracle demonstrating sustained positive cash flow—to reassure investors that the current wobble is minor.
Key developments you should know today
- U.S. stocks were pressured by AI names, with major indexes retreating on Friday after hitting record highs the previous day. The pan-European Stoxx 600 slipped about 0.5%, and the U.K. economy unexpectedly contracted 0.1% in the three months to October.
- Oracle has stated it will complete data centers for OpenAI on schedule, confirming there were no delays even after Bloomberg reported a potential shift from 2027 to 2028. The company insisted there have been no delays in the OpenAI arrangement.
- Coinbase plans to launch an in-house prediction market powered by Kalshi, a move intended to broaden the asset classes available on the crypto exchange.
- Berkshire Hathaway’s leadership transition is raising questions about whether the famed decentralized “Berkshire way” will persist as the company evolves under new leadership dynamics.
- China’s food security strategy is gaining prominence as the country weighs domestic agricultural strengthening amid U.S.-China tensions over soybean imports; Goldman Sachs views this as a strategic play in the sector.
And looking ahead
A bear statue outside the Frankfurt Stock Exchange underscores growing fears among European CEOs about a potential euro-area recession, amid a swirl of shocks that could affect the region’s outlook. This week features a high-stakes Brussels summit and the European Central Bank’s final policy meeting of the year, with topics including defrosting frozen Russian assets for Ukraine aid, the tech battleground between the EU and the U.S., and updated macro figures at the ECB gathering.
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