The Economic Times·2025-12-13 03:53Core Viewpoint - The recent turbulence in AI-related stocks, particularly due to negative updates from Oracle and Broadcom, has reignited concerns about overvaluation and a potential AI bubble, yet many investors remain optimistic about the long-term prospects of AI technology [1][2][3]. Company-Specific Summaries - Oracle's stock has faced significant pressure, dropping as much as 17% since Wednesday's close, following a warning that capital expenditures for fiscal 2026 are expected to be $15 billion higher than previously estimated, and the completion dates for data centers for OpenAI have been pushed back to 2028 from 2027 [3][4][5]. - Broadcom shares fell over 11% after the company indicated that increasing sales of lower-margin custom AI processors are impacting profitability, raising concerns about the sustainability of its business model [4][5]. - Meta's shares also experienced an 11% decline after forecasting significantly larger capital expenses for the upcoming year due to AI investments, including the construction of new data centers [8]. Industry Trends - Investors are becoming more selective in the AI sector, showing less willingness to reward indiscriminate spending on AI, which has led to a notable shift in the correlation between capital spending and stock prices [7][8]. - Despite concerns about a potential bubble, data indicates that investors are not aggressively betting against the largest AI companies, with short-selling activity primarily focused on smaller and mid-cap AI stocks [10][12]. - The overall sentiment suggests that while there is skepticism regarding individual AI stocks, there is no broad consensus on an impending collapse of the AI market [11][13].