Signage at the Broadcom Inc. headquarters in San Jose, California, U.S., on Monday, June 2, 2025.
The sell-off in artificial intelligence stocks continued unabated Friday stateside. Broadcom shares tumbled more than 11% as investors grew concerned over lower margins and uncertain deals. Names such as Nvidia , Advanced Micro Devices and Oracle fell in sympathy, which caused major U.S. indexes to close lower.
It was a motif patterning the week. Even though the Dow Jones Industrial Average rose 1.1% week on week on the back of outperformance by financial stocks, tech names dragged down the S&P 500 and the Nasdaq Composite , which fell 0.6% and 1.6% respectively for the week.
That said, investors could have just been jittery amid the narrative of an apparent AI bubble, and were spooked by any sign of bad news. After all, Broadcom's earnings — as well as its guidance for the current quarter — breezed past expectations.
"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," Bernstein analyst Stacy Rasgon, who has a "buy" rating on Broadcom, wrote in a Friday note.
Future prospects also look rosy, according to UBS. "We expect high profitability and the accelerating impact of the AI, power and resources, and longevity themes to drive 2026 performance," said strategist Sagar Khandelwal.
But in the near term, investors may still be flighty, unless something concretely reassuring, such as Oracle achieving positive cash flow, reassures them the snapping sound is just a twig in the forest.