AI Hangover Hits the Tape: Broadcom’s Face-Plant Spooks the Whole Complex

Friday felt like the market opened the AI bill… and actually read it

If you’ve been enjoying the “AI solves everything” trade, Friday was the part where the waiter drops the check and everyone pretends they left their wallet at home. Semis rolled over, megacaps sagged, and the market’s tolerance for vague “trust us, 2026 is complicated” commentary hit its limit.

Market snapshot: risk-off, but not panic

• The S&P 500 finished at 6,827.41 (-1.1%), the Nasdaq at 23,195.17 (-1.7%), and the Dow at 48,458.05 (-0.5%)—a clean “tech leads down” session.

• Rates stayed a co-star rather than the villain: the 10-year Treasury yield ended around 4.19%.

• In FX, EUR/USD closed near 1.1740, basically steady-ish, not screaming “crisis” either.

• Energy didn’t rescue anyone: Brent settled around $61.12 and WTI around $57.44, capping a rough week on oversupply worries.

• Crypto wasn’t feeling brave, Bitcoin (BTC) $89,857 | -0.34%.

The main event: AI gets cross-examined (and the jury is cranky)

The epicenter was Broadcom (AVGO | -11.43%). The quarter itself wasn’t the problem, expectations were. What spooked traders was the messaging: talk of at least ~$3B in AI orders over the next six quarters sounded like “minimum,” but the market heard “is that it?” Add the refusal to paint a clear picture for 2026, so the stock got treated like it missed earnings by a mile.

Oracle (ORCL | -4.47%) didn’t help the vibe. There was an additional twist: a report that OpenAI-related data-center timelines were being pushed out, which Oracle publicly pushed back on, saying milestones remain aligned. In other words: the rumor hurt, the denial arrived, and the market still didn’t relax.

Once “AI infrastructure returns” becomes the question, the whole neighborhood feels it:

• Nvidia (NVDA | -3.27%)
• AMD (AMD | -4.81%)

Hyperscaler gravity too:

• Amazon (AMZN | -1.78%)
• Microsoft (MSFT | -1.02%)
• Alphabet (GOOGL | -1.01%)
• Meta (META | -1.30%)

This wasn’t “AI is dead.” It was “AI needs to start behaving like a business model instead of a religion.”

AI needs to start behaving like a business model instead of a religion.

Apple as the accidental hedge

One of the more delicious ironies: Apple (AAPL | +0.09%) basically shrugged.

After months of being scolded for not spending like a hyperscaler, Apple is suddenly being rewarded for not lighting hundreds of billions on fire in the name of GPUs. It’s the “anti-AI” trade by default and yes, it’s still not cheap.

Consumers: Costco steady, Lululemon spicy, RH surprisingly alive

Away from the AI soap opera, consumer stories were more… practical.

Costco (COST | -0.02%) delivered solid momentum, comps around 6.4% in the quarter ended Nov. 23, per the company’s reporting, which is exactly the kind of “quietly strong” signal markets usually like.

Lululemon (LULU | +9.60%) ripped higher, helped by better-than-expected results and CEO succession news (Calvin McDonald set to step down Jan. 31, 2026). The stock basically did what traders do when uncertainty becomes structured uncertainty: it rallied.

RH (RH | +5.67%) joined the “wait, that’s better than feared” club after beating expectations on revenue outlook.

Policy rumor of the day: cannabis stocks got a contact high

This one mattered because it wasn’t earnings, it was narrative propulsion. Cannabis names exploded on reporting that President Trump may push to loosen federal marijuana restrictions, including discussion of reclassification. Important emphasis: reported, not done.

Price action didn’t ask for nuance:

• Tilray (TLRY | +44.13%)

• Canopy Growth (CGC| +53.98%)

If you trade these, just remember: this sector can go from “policy catalyst” to “why am I holding this?” in the time it takes your broker app to refresh.

Open the 'cannabis stocks list' in ChartMill

What I’m watching next: the market’s “reality check” week

This week’s setup is basically: AI nerves + a backlog of key U.S. data. On the calendar, I’m focused on items like Empire State manufacturing, CPI, and other delayed releases that could jerk rate expectations around again.

On the earnings front, we’re heading into reports from names like Micron, Accenture, Nike, and FedEx, which is relevant because semis and consumer demand are exactly where the market is currently the most emotionally unstable.

---

Kristoff - ChartMill

Next to read: Breadth Stumbles on Heavy Distribution, But the Foundation Holds