Stock market today: S&P 500 slumps as Broadcom fuels dip in chip stocks

Wall Street is experiencing fresh concerns regarding artificial intelligence (AI) spending, as shares of Broadcom and Oracle have declined significantly, contributing to a volatile week for the markets. Broadcom's stock fell sharply after failing to meet investor expectations, while Oracle's disappointing earnings report further exacerbated the situation.

US tech stocks, particularly those of Broadcom, experienced a significant decline, with Broadcom's shares tumbling 11.4% following a disappointing financial forecast that failed to meet Wall Street expectations. This downturn reflects growing investor concerns about the sustainability of the AI boom and its impact on tech valuations.

Bank of America has reset its stock price target for Broadcom following the company's Q4 earnings report, where CEO Hock Tan highlighted a significant year-over-year growth in their custom-accelerated business. Broadcom's performance exceeded expectations, with a revenue forecast of approximately $19.1 billion for the upcoming fiscal first quarter.

Veteran analyst Tom Lee has set a new target for the S&P 500, projecting it will reach 5,000 by 2026, reflecting his belief that current market sentiment is overly cautious. This forecast comes after significant stock market activity and insights from major financial institutions.

Broadcom's shares experienced a significant decline as concerns over profit margins and the financial stability of OpenAI overshadowed the company's strong earnings report. Despite exceeding earnings expectations and forecasting approximately $19.1 billion in revenue for the upcoming fiscal first quarter, investor sentiment turned negative due to unmet sales outlooks in the AI market.

Broadcom's shares fell sharply after the company failed to meet investor expectations regarding its artificial intelligence (AI) prospects, coinciding with a decline in Nasdaq futures following Oracle's disappointing earnings report. This downturn occurred despite a record close for the S&P 500 after a recent Federal Reserve rate cut.

Broadcom's shares fell after the company's sales outlook for the AI market did not meet investor expectations, despite previously reporting strong earnings and a revenue forecast of $19.1 billion for the upcoming fiscal first quarter. President Trump announced the US's willingness to assist Ukraine's security as part of a peace plan.

The S&P 500 index has achieved a new record high, reflecting a broadening stock rally as enthusiasm around artificial intelligence investments begins to cool. This milestone marks a significant recovery in investor sentiment, following a period of volatility in the markets.