Investopedia·2025-12-09 20:50Core Insights - Two major tech companies, Oracle and Broadcom, are set to report quarterly earnings, with Oracle's stock down over 30% recently due to concerns about customer concentration and an AI bubble, while Broadcom's stock has risen nearly 20% since the launch of Google's Gemini 3, indicating a divergence in market sentiment towards AI investments [1][6][10]. Company Summaries Oracle - Oracle's stock surged 36% after reporting a significant increase in its cloud computing backlog, which grew to nearly $500 billion, largely due to a $300 billion deal with OpenAI [4]. - Concerns have arisen regarding Oracle's reliance on this single deal, leading to skepticism about its long-term growth potential [4]. - The company has increased its debt burden by selling $18 billion in bonds to finance data center investments, raising questions about its financial stability compared to competitors like Microsoft and Amazon [5]. Broadcom - Broadcom's stock has performed well, boosted by a $10 billion order for custom chips from a new customer, believed to be OpenAI, and optimism surrounding its AI business [7]. - The upcoming launch of Google's Gemini 3, which utilizes Broadcom-designed chips, has further enhanced market confidence in Broadcom's ability to compete with Nvidia in the AI chip market [7][8]. - Analysts have raised price targets for Broadcom, anticipating strong demand for custom chips and networking solutions to accelerate its AI business in the coming year [11]. Industry Context - Wall Street analysts are generally optimistic about the earnings reports from both companies, expecting them to reflect sustained AI demand [2]. - Recent research indicates a potential shift in the AI investment landscape, with a decrease in correlation among AI hyperscaler stocks, suggesting that not all companies may benefit equally from AI trends moving forward [12].