The sell-off in artificial intelligence stocks continued on Friday in U.S. trading, as investors weighed whether AI-driven revenue can translate into durable profit margins amid ongoing price competition and deal-cycle uncertainty. Broadcom led the declines after reporting results that beat expectations on the top line but offered cautious signs on margins in a market still grappling with the pace of AI expansion.
Other marquee AI-related names remained under pressure, with Nvidia, Advanced Micro Devices, and Oracle moving lower on the week. The broad market drift dragged major indices lower, even as the Dow advanced on strength in financials. The S&P 500 and the Nasdaq Composite closed the week down, underscoring the tension between strong AI spending and concerns about profitability in the near term.
Analysts highlighted a notable split between the continued execution of AI opportunities and the margin discipline required to sustain that growth. A prominent analyst at Bernstein noted that Broadcom’s AI story has continued to overdeliver and is accelerating, reinforcing a constructive longer-term thesis for investors willing to ride out shorter-term volatility.
Looking ahead, strategists see a mixed but constructive setup. Some expect AI-led efficiency gains and durable monetization to support higher profitability and revenue growth in 2026, aided by data-center expansion and AI infrastructure demand. Others caution that near-term sentiment may remain fragile until visible signs of sustained cash flow and a broader AI market normalization emerge.
For now, investors may stay cautious unless a clearly positive cash-flow signal from a major AI beneficiary emerges to reassure markets that the current pullback is a temporary pause rather than the start of a broader downturn.
What you need to know today
U.S. stocks were pressured by AI-related names, with major indexes closing lower after a period of recent gains. Across Europe, the Stoxx 600 slipped roughly half a percent, while the U.K. economy contracted modestly in the three months to October, underscoring ongoing macro headwinds for global markets.
Oracle has said there have been no delays in its OpenAI-related data-center work, pushing back on a Bloomberg report that suggested a delay to 2028 from 2027. The company reiterated its commitment to completing the projects on schedule, but investors will be watching for any new updates on execution timelines and cost.
Coinbase is planning to introduce in-house prediction markets powered by Kalshi, in a move aimed at expanding the range of asset classes available on the exchange and potentially unlocking new revenue streams tied to forecast-based trading.
The leadership transition at Berkshire Hathaway continues to draw attention, with market observers debating whether the famed decentralized “Berkshire way” is evolving as the company navigates succession and strategic shifts.
In China, the focus on food security has come into sharper view as the country reassesses its agricultural strategy. Goldman Sachs has outlined potential ways to participate in this evolving sector, highlighting the role of domestic policy and supply-chain resilience in shaping investment opportunities.
And finally…
A bear statue stands outside the Frankfurt Stock Exchange, a reminder of the global market cycle as euro-area risks persist amid a confluence of shocks that threaten the outlook for Europe’s economy.
This week is set to be pivotal, with a high-stakes European summit and the European Central Bank’s final policy meeting of the year on the calendar. Key topics include policy responses to energy and growth dynamics, trade tensions in technology and data, and updated economic indicators that will influence the trajectory of monetary policy in the region.
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