The artificial intelligence gold rush hit a speed bump this Friday as investors dumped major tech stocks, causing a significant dip in the U.S. markets. Broadcom led the drop, plunging more than 11% amid concerns about its profit margins and the certainty of its future deals. This fear spread quickly, pulling down heavy hitters like Nvidia, AMD, and Oracle along with it. While the Dow Jones rose over the week thanks to strong bank performance, the tech-heavy Nasdaq and the S&P 500 finished the week in the red.
The strange part about this sell-off is that Broadcom actually posted good numbers. Their earnings beat expectations, and their forecast for the next few months looks strong. Stacy Rasgon, an analyst at Bernstein, pointed out the disconnect. He noted that Broadcom is “overdelivering” on its AI promises and doing so faster than expected. This suggests that investors are simply jittery. They appear terrified that the “AI bubble” might pop, so they run for the exit at the first sign of trouble, even when the underlying business remains healthy.
Oracle also found itself in the middle of the drama. A Bloomberg report claimed the company would miss its deadline to finish massive data centers for OpenAI, alleging the completion date would slip from 2027 to 2028. Oracle fired back immediately, stating flatly that “there have been no delays.” They insist the project will finish exactly on time.
Despite the current panic, some experts see a bright future. Strategists at UBS believe that by 2026, the combination of AI demand and power needs will drive huge profits. For now, however, the market remains on edge. Until companies show rock-solid cash flow, investors seem ready to panic at the slightest noise. With the UK economy also showing signs of shrinking, the global mood is tense, but the main story remains the shaken confidence in the tech sector’s skyrocketing growth.
