Broadcom and Oracle under Intense in AI Stock Selling Pressure
Oracle, Broadcom, and other AI companies are struggling to stay profitable, and their stock values are dipping.
Quick overview
- Stock futures for Oracle and Broadcom fell on Tuesday despite significant growth in the AI sector.
- Oracle's stock has halved in value due to high capital spending, reporting $13 billion in negative cash flow.
- Broadcom also faces financial strain with $9.8 billion in operating expenses and $37 billion spent from July 2024 to July 2025.
- Many AI companies are struggling with profitability, contributing to a speculative bubble that investors fear may burst.
Stock futures were lower for leading AI companies Oracle (ORCL) and Broadcom (AVGO) on Tuesday despite massive growth for the artificial intelligence sector.
Oracle is down 2.6% and Broadcom slipped by 5.59% on Tuesday as the market opened. These stocks are part of a larger bearish trend for AI-related cryptocurrencies that has left many tech companies with a fraction of their value as 2025 closes off.
Over 2025, Oracle has lost half of its stock worth due to the excessive capital spending the company has been doing. For their second quarter, Oracle reported $13 billion in negative cash flow, and they are far from the only company spending money like this.
AI Stock Troubles Are Not Going Anywhere
How long should investors expect AI stocks to flounder? They may continue to perform poorly on the stock market so long as tech companies keep spending exorbitant amounts of money on AI development. Broadcom is guilty of the same heavy spending, reporting $9.8 billion in operating expenses for its recent quarter. The company also spent $37 billion from July of 2024 to July of 2025.
Where is all of that money going? A large portion has been used to purchase custom AI chips as well as server racks for some of its biggest clients. Oracle has to spend billions to keep up with the AI infrastructure demands of customers like Anthropic OpenAI, and Google.
Broadcom also has to stay on the cutting edge of technology, and in 2023, they reported that they spent $5.25 billion on research and development. That same year, they brought in $35.8 billion in revenue.
CoreWeave (CRWV) is yet another leading AI-focused company that has been operating in the red in recent years. Their stock is down 2.3% for Tuesday and the company reported $14 billion in debt in September of 2025. During the company’s third quarter, they reported that $1.9 billion was spent on capital expenditures.
These are only a few of the AI companies that are spending almost as much as they are earning or are operating from a place of financial debt. Despite the explosive growth of the AI sector, companies leading the charge forward in that niche are not as profitable as their shareholders want them to be. They are contributing to the speculative bubble that has formed in the industry and that investors fear may burst very soon.
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