Investors are worried about a potential AI bubble affecting stocks such as Broadcom and Oracle. Despite strong quarterly earnings from these companies, concerns over weak margins and lack of immediate revenue from OpenAI have emerged. However, analysts remain mostly positive, predicting significant growth in AI revenue for the next year.
Broadcom shares pulled back after its latest results reignited concerns about an AI-fueled bubble. Analysts at UBS believe Broadcom’s solid results but cautious commentary on backlog and margins may drive short-term selling. Despite this, they expect AI revenue to grow significantly.
Oracle shares also fell over 10% on Thursday, with a further 3% decline on Friday, amid weakness in its software business. A Bloomberg report claimed the company had delayed completing data centers for OpenAI until 2028 from 2027, but Oracle later denied these claims.
In contrast, Lululemon shares rose more than 10% on Friday after the company announced that its CEO would step down and plans to find a new one. The stock has rallied about 12% over the last week. Analysts at Bernstein believe the change in leadership is a positive sign for US growth.
EchoStar shares have surged over 42% in the last week due to its stake in SpaceX, which is advancing plans for an initial public offering worth more than $30 billion. Robinhood shares fell over 8% on Thursday and are down 1.8% so far on Friday after reporting a sharp drop in trading activity.
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Source: https://www.investing.com/news/stock-market-news/investingcoms-stocks-of-the-week-4406520