Broadcom shares dropped over 11% due to lower-margin custom AI processors affecting profitability, raising concerns about future earnings. Oracle also fell 10.8% from high capital spending on AI infrastructure. Despite fears of a tech bubble, analysts remain optimistic about AI’s potential and chipmakers’ growth. Broadcom, a key AI processor developer, has secured major contracts and its stock is up 57% this year. The company expects margin pressure from increased AI revenue, with a $73 billion backlog to ship in the next 18 months. If losses continue, Broadcom could lose over $213 billion in market value. Morningstar analysts are not worried, as AI chips are margin-accretive.

Read more at Yahoo Finance: Broadcom shares fall as margin warning sparks AI payoff worries