Wall Street Breakfast Broadcom gives AI traders another headache
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Dec 12, 2025 Concerns over margin pressures lead to sell-offs in major AI stocks, with Broadcom's CFO warning of tough times ahead. Pot stocks catch a break as Trump considers easing cannabis regulations, boosting market optimism. In a major shift, Anheuser-Busch closes a brewery to modernize operations and enhance efficiency. Meanwhile, Oracle's steep drop wipes out billions from Larry Ellison's net worth, sparking discussions on tech stock volatility. Catch all the latest trade trends and market insights that investors need to know!
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AI Revenue Growth Can Compress Margins
- Broadcom's AI-driven rally faces margin pressure as AI revenue takes a larger mix and lowers near-term gross margins.
- The company has a $73 billion AI backlog but lower-margin system sales will weigh on margins into fiscal 2026.
Broadcom Became A Core AI Market Bet
- Broadcom's market cap now exceeds Meta and Tesla after a 78% rally, underscoring its central role in the AI narrative.
- Lead times for new AI orders range from six months to a year, signaling delayed revenue recognition and multi-quarter impacts.
Potential Federal Reclassification Boosts Pot Stocks
- Cannabis stocks jumped on reports that President Trump may reclassify marijuana from Schedule I to Schedule III.
- A move to Schedule III would recognize medical use and lower perceived legal risk for cannabis companies.