New York, United States: U.S. stock markets ended lower on December 12, 2025, with losses spilling into global markets on Friday, as renewed concerns over a potential AI investment bubble rattled investor confidence. Major indices, including the S&P 500 and the Nasdaq Composite, retreated after cautious earnings outlooks from technology heavyweights Broadcom and Oracle.
The weaker-than-expected forecasts reignited fears that valuations across the artificial intelligence sector may have outpaced realistic growth prospects. Investors responded by rotating out of high-growth tech stocks, triggering a broader sell-off in AI-linked equities that had driven much of Wall Street’s rally in 2025.
Key Companies Involved
Broadcom – Semiconductor and AI infrastructure firm
Oracle – Cloud and enterprise software giant
Adding to the pressure, U.S. Treasury bond yields climbed, making equities less attractive and intensifying concerns about tighter financial conditions. Analysts noted that rising yields often hit technology stocks hardest due to their reliance on future earnings growth.
Market sentiment reflected a growing global reassessment of AI-driven investments, with similar caution observed across European and Asian markets. While long-term optimism around artificial intelligence remains intact, traders appear increasingly wary of overheated expectations and near-term earnings risks.
The latest downturn underscores a broader shift toward risk aversion, as investors seek clarity on whether the AI boom represents sustainable innovation—or the early signs of another market bubble.
