AI Stock Retreat: Oracle, Broadcom Lead Tech Sell-Off
December 15, 2025, 10:01 pm
Tech stocks are falling. AI leaders are driving the decline. Oracle and Broadcom experienced significant drops Friday. Revenue misses and margin concerns fuel investor anxiety. The Nasdaq Composite is down. This impacts the broader market. Concerns center on AI infrastructure costs. Demand remains high, but expenses are rising. Investors are reassessing valuations. Oracle’s debt load is a key worry. Broadcom’s short-term margin squeeze adds to the pressure. Despite strong earnings, Broadcom’s stock plummeted. AI’s dominance is being questioned. The market is reacting to uncertainty. Analysts remain largely positive long-term. They suggest buying the dip. However, immediate concerns are real. CoreWeave also suffered substantial losses. The AI rally may be pausing. Investors are rotating into other sectors. This shift impacts tech’s overall performance. The situation demands careful monitoring. Future earnings reports will be crucial. The AI narrative is evolving. It’s no longer a guaranteed win. Investors are demanding more clarity. They want sustainable growth, not just hype. This correction could be healthy. It could reset valuations. It could pave the way for future gains. But for now, caution is warranted. The AI trade faces headwinds. The market is sending a clear message. Profit-taking is underway. The future of AI investment is uncertain. This sell-off is a wake-up call. It highlights the risks involved. It underscores the importance of due diligence. It emphasizes the need for realistic expectations. The AI revolution is still unfolding. But it won’t be a straight line up. Expect volatility. Expect corrections. Expect scrutiny. The market is demanding substance. It’s no longer enough to simply be “AI-related.” Companies must deliver results. They must demonstrate profitability. They must justify their valuations. This is a new era for AI investing. It’s an era of accountability. It’s an era of realism. It’s an era of careful consideration. The recent market downturn reflects this shift. It’s a sign that the AI bubble may be deflating. Or, it could be a temporary pause. Only time will tell.
---
Date: 12/12/2025
Oracle shares slid on Friday as investors appear to tap out of technology.The drop comes after the company’s quarterly revenue missed analyst expectations.Other AI-related names like Micron and CoreWeave also extended losses.U.S. artificial intelligence names are mostly in negative territory on Friday, extending losses into their third day.Oracle fell 6% on Friday, while Nvidia dropped almost 5%. Micron slid 7%, and CoreWeave was down more than 10% around 11:35 E.T.Broadcom, which reported a strong quarter on Thursday, is down 10%. The Nasdaq was lower by about 2%.It’s been a tough week for the AI trade, with database software maker Oracle plummeting 11% on Thursday after revenue earnings missed analyst expectations late Wednesday.Oracle dragged other AI-related names down with it despite a record-breaking rally elsewhere on Wall Street, suggesting investors are rotating out of tech into other parts of the market.The tech-heavy Nasdaq Composite fell 0.26% on Thursday, despite the Dow Jones Industrial Average and S&P 500 hitting fresh records at the end of the session.Despite booming demand for Oracle’s artificial intelligence infrastructure, it posted mixed results this week. Revenue came in at $16.06 billion, compared with $16.21 billion expected by analysts, according to data compiled by LSEG.It followed widespread speculation around the long-term health of the company, with investors cautious about its reliance on debt to execute its AI infrastructure build-out. The broader industry’s circular dealmaking has also raised eyebrows.“We think recent investor scrutiny on artificial intelligence’s potential and circular GPU deals can be overly punitive to key AI suppliers like Oracle,” said Morningstar Equity Analyst Luke Yang. “Oracle remains a respectable cloud provider that enjoys strong switching costs across its database, application, and infrastructure lineup.”That said, the firm reduced its fair value estimate for wide-moat Oracle to $286 per share, down from $340. Morningstar’s moat rating refers to its assessment of a company’s durable competitive advantage.“We lowered our long-term earnings outlook as delivering Oracle’s planned capacity on time now proved to be a harder task. However, we continue to view shares as undervalued,” Yang added."
Date: 12/12/2025
Broadcom’s better-than-expected results weren’t enough to keep investors from rushing for the exits.The stock sank alongside a decline in shares of Oracle, CoreWeave and other companies tied to AI infrastructure.Analysts see Broadcom taking a significant margin hit in the short term due to its costly buildouts.Broadcom’s quarterly results and guidance sailed past Wall Street estimates. It didn’t matter.The chipmaker’s shares plummeted 11% on Friday, on pace for their worst day since January, as investors ran for the exits on the artificial intelligence trade. Oracle dropped 4% a day after plunging 10% following its earnings report.AI has been the driver for the stock market and the broader economy this year, so any negative sentiment has potentially far-reaching consequences. The Nasdaq on Friday fell about 1.4%, and the S&P 500 declined declined by nearly 1%.The companies getting hit the hardest are the ones most closely tied to AI infrastructure, which has been booming as hyperscalers build out their data centers to try and meet what they describe as insatiable demand for compute-intensive AI services. Broadcom makes custom chips for many of the the largest tech companies, and saw its market cap about double each of the past two years before rallying again in 2025.“This stock is up 75-80% year to date. You’re seeing a little bit of a pullback,” Vijay Rakesh, an analyst at Mizuho, told CNBC’s “Squawk on the Street” on Friday. “We would be buyers on this pullback.”Mizuho raised its price target on the stock to $450 from $435. It was trading below $364 as of Friday afternoon.“This is still where the growth is,” Rakesh said. “They are still the big supplier to Google on their entire hardware stack, to Meta, to Anthropic and even OpenAI coming down the road.”Broadcom reported revenue growth of 28% during the quarter, largely due to a 74% increase in AI chip sales, to a total of $18.02 billion, topping the $17.49 billion average analyst estimate, according to LSEG. Adjusted earnings per share of $1.95 adjusted topped the $1.86 average estimate.CEO Hock Tan said Broadcom expects AI chip sales this quarter to double from a year earlier to $8.2 billion, both from custom AI chips as well as semiconductors for AI networking.One concern among investors is that margins are coming down, at least in the short term, due to higher upfront costs. CFO Kirsten Spears said on the earnings call that “gross margins will be lower” for some of Broadcom’s AI chip systems because the company will have to buy more parts to produce the server racks.Broadcom also said it had a $73 billion backlog of AI orders over the next 18 months. Part of that is from $21 billion of orders from Anthropic, which the company revealed as a key customer on Thursday.While OpenAI has been a highly touted customer following a multibillion-dollar agreement announced in October, Tan doused some hope for the deal, telling investors late Thursday that, “We do not expect much in ’26.”Bernstein analyst Stacy Rasgon said in a note on Friday that “AI angst” was driving Broadcom’s shares lower.“Frankly we aren’t sure what else one could desire as the company’s AI story continues to not only overdeliver but is doing it at an accelerating rate,” Rasgon, who recommends buying the stock and raised his price target, wrote in the note.Oracle has been facing more extreme skepticism. The stock is now down more than 40% from its record reached in September. The company beat on earnings but missed on revenue in its report on Wednesday, and investors were disappointed they didn’t get more detail on how Oracle will finance its massive buildout that so far has required mounds of debt.CoreWeave, which is investing in data centers to offer cloud-based AI services, sank 9% on Friday and has lost more than half its value since peaking in June.WATCH: Mizuho raises price target on Broadcom"
---
Articles:
Article 1
" AI-led tech slide extends into third day as Oracle, Broadcom fallDate: 12/12/2025
Oracle shares slid on Friday as investors appear to tap out of technology.The drop comes after the company’s quarterly revenue missed analyst expectations.Other AI-related names like Micron and CoreWeave also extended losses.U.S. artificial intelligence names are mostly in negative territory on Friday, extending losses into their third day.Oracle fell 6% on Friday, while Nvidia dropped almost 5%. Micron slid 7%, and CoreWeave was down more than 10% around 11:35 E.T.Broadcom, which reported a strong quarter on Thursday, is down 10%. The Nasdaq was lower by about 2%.It’s been a tough week for the AI trade, with database software maker Oracle plummeting 11% on Thursday after revenue earnings missed analyst expectations late Wednesday.Oracle dragged other AI-related names down with it despite a record-breaking rally elsewhere on Wall Street, suggesting investors are rotating out of tech into other parts of the market.The tech-heavy Nasdaq Composite fell 0.26% on Thursday, despite the Dow Jones Industrial Average and S&P 500 hitting fresh records at the end of the session.Despite booming demand for Oracle’s artificial intelligence infrastructure, it posted mixed results this week. Revenue came in at $16.06 billion, compared with $16.21 billion expected by analysts, according to data compiled by LSEG.It followed widespread speculation around the long-term health of the company, with investors cautious about its reliance on debt to execute its AI infrastructure build-out. The broader industry’s circular dealmaking has also raised eyebrows.“We think recent investor scrutiny on artificial intelligence’s potential and circular GPU deals can be overly punitive to key AI suppliers like Oracle,” said Morningstar Equity Analyst Luke Yang. “Oracle remains a respectable cloud provider that enjoys strong switching costs across its database, application, and infrastructure lineup.”That said, the firm reduced its fair value estimate for wide-moat Oracle to $286 per share, down from $340. Morningstar’s moat rating refers to its assessment of a company’s durable competitive advantage.“We lowered our long-term earnings outlook as delivering Oracle’s planned capacity on time now proved to be a harder task. However, we continue to view shares as undervalued,” Yang added."
Article 2
" Broadcom tumbles 11% despite blockbuster earnings as ‘AI angst’ weighs on Oracle, NvidiaDate: 12/12/2025
Broadcom’s better-than-expected results weren’t enough to keep investors from rushing for the exits.The stock sank alongside a decline in shares of Oracle, CoreWeave and other companies tied to AI infrastructure.Analysts see Broadcom taking a significant margin hit in the short term due to its costly buildouts.Broadcom’s quarterly results and guidance sailed past Wall Street estimates. It didn’t matter.The chipmaker’s shares plummeted 11% on Friday, on pace for their worst day since January, as investors ran for the exits on the artificial intelligence trade. Oracle dropped 4% a day after plunging 10% following its earnings report.AI has been the driver for the stock market and the broader economy this year, so any negative sentiment has potentially far-reaching consequences. The Nasdaq on Friday fell about 1.4%, and the S&P 500 declined declined by nearly 1%.The companies getting hit the hardest are the ones most closely tied to AI infrastructure, which has been booming as hyperscalers build out their data centers to try and meet what they describe as insatiable demand for compute-intensive AI services. Broadcom makes custom chips for many of the the largest tech companies, and saw its market cap about double each of the past two years before rallying again in 2025.“This stock is up 75-80% year to date. You’re seeing a little bit of a pullback,” Vijay Rakesh, an analyst at Mizuho, told CNBC’s “Squawk on the Street” on Friday. “We would be buyers on this pullback.”Mizuho raised its price target on the stock to $450 from $435. It was trading below $364 as of Friday afternoon.“This is still where the growth is,” Rakesh said. “They are still the big supplier to Google on their entire hardware stack, to Meta, to Anthropic and even OpenAI coming down the road.”Broadcom reported revenue growth of 28% during the quarter, largely due to a 74% increase in AI chip sales, to a total of $18.02 billion, topping the $17.49 billion average analyst estimate, according to LSEG. Adjusted earnings per share of $1.95 adjusted topped the $1.86 average estimate.CEO Hock Tan said Broadcom expects AI chip sales this quarter to double from a year earlier to $8.2 billion, both from custom AI chips as well as semiconductors for AI networking.One concern among investors is that margins are coming down, at least in the short term, due to higher upfront costs. CFO Kirsten Spears said on the earnings call that “gross margins will be lower” for some of Broadcom’s AI chip systems because the company will have to buy more parts to produce the server racks.Broadcom also said it had a $73 billion backlog of AI orders over the next 18 months. Part of that is from $21 billion of orders from Anthropic, which the company revealed as a key customer on Thursday.While OpenAI has been a highly touted customer following a multibillion-dollar agreement announced in October, Tan doused some hope for the deal, telling investors late Thursday that, “We do not expect much in ’26.”Bernstein analyst Stacy Rasgon said in a note on Friday that “AI angst” was driving Broadcom’s shares lower.“Frankly we aren’t sure what else one could desire as the company’s AI story continues to not only overdeliver but is doing it at an accelerating rate,” Rasgon, who recommends buying the stock and raised his price target, wrote in the note.Oracle has been facing more extreme skepticism. The stock is now down more than 40% from its record reached in September. The company beat on earnings but missed on revenue in its report on Wednesday, and investors were disappointed they didn’t get more detail on how Oracle will finance its massive buildout that so far has required mounds of debt.CoreWeave, which is investing in data centers to offer cloud-based AI services, sank 9% on Friday and has lost more than half its value since peaking in June.WATCH: Mizuho raises price target on Broadcom"