Broadcom’s quarterly results and guidance sailed past Wall Street estimates. It didn’t matter.

The chipmaker’s shares plummeted 11% on Friday, on pace for their worst day since January, as investors ran for the exits on the artificial intelligence trade. Oracle dropped 4% a day after plunging 10% following its earnings report.

AI has been the driver for the stock market and the broader economy this year, so any negative sentiment has potentially far-reaching consequences. The Nasdaq on Friday fell about 1.4%, and the S&P 500 declined declined by nearly 1%.

The companies getting hit the hardest are the ones most closely tied to AI infrastructure, which has been booming as hyperscalers build out their data centers to try and meet what they describe as insatiable demand for compute-intensive AI services. Broadcom makes custom chips for many of the the largest tech companies, and saw its market cap about double each of the past two years before rallying again in 2025.

“This stock is up 75-80% year to date. You’re seeing a little bit of a pullback,” Vijay Rakesh, an analyst at Mizuho, told CNBC’s “Squawk on the Street” on Friday. “We would be buyers on this pullback.”

Mizuho raised its price target on the stock to $450 from $435. It was trading below $364 as of Friday afternoon.

“This is still where the growth is,” Rakesh said. “They are still the big supplier to Google on their entire hardware stack, to Meta, to Anthropic and even OpenAI coming down the road.”

Broadcom reported revenue growth of 28% during the quarter, largely due to a 74% increase in AI chip sales, to a total of $18.02 billion, topping the $17.49 billion average analyst estimate, according to LSEG. Adjusted earnings per share of $1.95 adjusted topped the $1.86 average estimate.

CEO Hock Tan said Broadcom expects AI chip sales this quarter to double from a year earlier to $8.2 billion, both from custom AI chips as well as semiconductors for AI networking.

One concern among investors is that margins are coming down, at least in the short term, due to higher upfront costs. CFO Kirsten Spears said on the earnings call that “gross margins will be lower” for some of Broadcom’s AI chip systems because the company will have to buy more parts to produce the server racks.

Broadcom also said it had a $73 billion backlog of AI orders over the next 18 months. Part of that is from $21 billion of orders from Anthropic, which the company revealed as a key customer on Thursday.

While OpenAI has been a highly touted customer following a multibillion-dollar agreement announced in October, Tan doused some hope for the deal, telling investors late Thursday that, “We do not expect much in ’26.”

Bernstein analyst Stacy Rasgon said in a note on Friday that “AI angst” was driving Broadcom’s shares lower.

“Frankly we aren’t sure what else one could desire as the company’s AI story continues to not only overdeliver but is doing it at an accelerating rate,” Rasgon, who recommends buying the stock and raised his price target, wrote in the note.

Oracle has been facing more extreme skepticism. The stock is now down more than 40% from its record reached in September. The company beat on earnings but missed on revenue in its report on Wednesday, and investors were disappointed they didn’t get more detail on how Oracle will finance its massive buildout that so far has required mounds of debt.

CoreWeave, which is investing in data centers to offer cloud-based AI services, sank 9% on Friday and has lost more than half its value since peaking in June.

WATCH: Mizuho raises price target on Broadcom

Rivian Automotive impressed Wall Street on Thursday with its plans for artificial intelligence, automation and an internally developed silicon chip, but significant challenges involving demand and capital remain for the electric vehicle maker.

Despite Wall Street analysts expressing some optimism following Rivian’s first “Autonomy and AI Day,” the company’s stock fell 6.1% to close Thursday at $16.43 per share. But shares recovered during intraday trading Friday and were up more than 15%.

While the event didn’t cause many analysts to change ratings or price targets, Needham raised its price target on Rivian by 64% to $23 per share. The firm did so on the tech announcements and potential for future licensing deals, as well as higher-than-consensus expectations on deliveries next year of the company’s new midsize R2 SUV.

“RIVN signaled a shift from an [automaker] adopting autonomy to one leveraging AI to build end-to-end autonomy,” Needham analyst Chris Pierce said in a Friday investor note.

The company’s stock had ramped up heading into the AI Day, but many analysts believed the announcements from the event were already “priced in.” Shares also fell as OpenAI made its own AI announcement Thursday, revealing its most advanced model yet.

“We attended Rivian’s Autonomy & AI Day yesterday in Palo Alto and came away mostly impressed with the strategic direction outlined by management,” Deutsche Bank analyst Edison Yu said Friday in an investor note. “However, the stock’s weakness seems warranted given the run-up since earnings and lack of a major AI partnership/deal announcement.”

Rivian’s announcements included a proprietary chip, RAP1, designed for “physical AI,” namely autonomous driving; an evolved software architecture, or “brains” of the vehicle; a new AI assistant; and a roadmap for getting to “personal L4,” or fully self-driving personally owned vehicles.

The latter begins later this month with an update involving its hands-free driving system, followed by plans to continue to expand capabilities until vehicles reach full autonomy in the years ahead. Rivian did not disclose a timeframe for the full autonomy or potential robotaxi fleet autonomous vehicles.

Leading up to the event, Rivian shares were up more than 30% to $17.50. Despite those gains, shares remain well off the levels of the company’s IPO of $78 per share in 2021.

Barclays analyst Dan Levy and others said while Rivian’s technology announcements, including the surprise proprietary chip, were impressive, the company remains a “show me” story amid more challenging market conditions.

“With RIVN facing a tougher path to breakeven on core vehicle sales alone, we believe with enhanced AV/AI capabilities RIVN is further paving the path to additional software/service revenues, which would be margin accretive,” Levy said Friday in an investor note. “To be clear, there is certainly a ‘show me’ element for RIVN on its capabilities.”

Challenges include slumping EV demand following the end of up to $7,500 tax credits in September, lack of other support under the Trump administration and internal struggles at the company involving products and capital.

Several analysts noted the adoption of advanced driver assistance systems remains low across the industry, even at U.S. EV leader Tesla, and Rivian is continuing to play catch up to other companies that have offered such systems for years.

Rivian founder and CEO RJ Scaringe and other executives argued that the company’s vertical integration of in-house capabilities including software, AI, vehicle platforms and other technologies will allow the automaker to be more efficient, quicker and better than others.

“AI is enabling us to create technology and customer experiences at a rate that is completely different from what we’ve seen in the past,” Scaringe said during the event.

Such arguments, as well as the automaker’s prior $5.8 billion joint venture software deal with Volkswagen, have led Wall Street to price Rivian’s software business higher than its core of producing and selling EVs, given market conditions.

A $12 price target for Rivian shares from Morgan Stanley, which recently downgraded the company to underweight, includes $7 for software and services and $5 for its core automotive business. Several analysts added that Rivian might be able to license or sell its newest technologies, including chips.

“RIVN is developing a suite of hardware and software offerings to remain competitive in an Auto 2.0 world. However, several risks remain around demand, potentially limiting data capture needed to reach higher levels of autonomy,” Morgan Stanley’s Andrew Percoco said in a Friday note.

Morgan Stanley raised concerns about autonomy adoption rates, lackluster EV demand ahead of Rivian’s new “R2” vehicle next year and a prolonged path to profitability as reasoning for the rating confirmation.

RBC Capital Markets analyst Tom Narayan agreed: “The advancements enhance Rivian’s product offering but do not address ongoing concerns around liquidity and R2/R3 profitability.”

Rivian continues to lose billions of dollars annually, despite significant cost reductions and gains in software revenue thanks to its deal with VW.

Rivian ended the third quarter with $7.7 billion in total liquidity, including nearly $7.1 billion in cash, cash equivalents and short-term investments that Scaringe has said position the company “really well” for the R2 launch.

The R2 midsize SUV is crucial for Rivian — especially since it’s a major market in the U.S. With expectations of a $45,000 starting price, it is anticipated to broaden Rivian’s customer base and be a proof-point for the company’s efforts regarding profitability and cost savings.

Rivian’s current R1 pickup truck and SUV consumer models start at more than $70,000. It also builds electric delivery vans, largely for its biggest shareholder Amazon, that start around $80,000.

“Profitability pressure will likely intensify as Rivian rolls out its ~$45K R2 platform in the highly competitive mid-size SUV segment,” Narayan said. “While targeting a lower price point could increase market reach, the R1 platform’s struggles with profitability despite being nearly double the price of the R2 raise.”

Shares of Rivian, with a $22.5 billion market cap, are rated hold with a $15.43 per share price target, according to average ratings and estimates compiled by FactSet.

— CNBC’s Michael Bloom contributed to this report.

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Here are five key things investors need to know to start the trading day:

The S&P 500 and Dow Jones Industrial Average surged to new closing highs yesterday as investors dove into old-economy and blue-chip stocks. The Nasdaq Composite sat out of the rally, as an 11% drop in shares of Oracle catalyzed the latest wave of worry about artificial intelligence spending.

Here’s what to know:

• Oracle shares snapped a seven-day win streak and notched their worst day since January, as the company’s earnings left traders questioning the company’s AI investments.
• That left a bad taste in investors’ mouths on AI more broadly, with key players such as Nvidia, CoreWeave and Micron also sliding in Thursday’s session.
• But as AI stocks faltered, investors put money to work in more cyclical names like financial institutions and insurance providers.
• This morning, shares of Broadcom are down nearly 6% before the bell despite the company beating expectations on both lines yesterday.
• The semiconductor company told investors that it expects its current-quarter AI chip sales to double from a year ago. It also revealed that its mystery $10 billion customer was Anthropic.
• Hundreds of miles from Wall Street, President Donald Trump last night signed an executive order establishing a single national regulation standard for AI that curbs states’ regulatory power.
• Follow live markets updates here.

Another day, another CEO departure: Lululemon announced yesterday that CEO Calvin McDonald will step down at the end of January. He will be replaced in the interim by two executives while the Canadian retailer searches for a permanent successor.

Lululemon reported better-than-expected earnings for the third quarter, but, as CNBC’s Gabrielle Fonrouge notes, the company has been underperforming for more than a year. Shares of the athleisure retailer are up more than 9% this morning.

Costco also surpassed Wall Street’s forecasts for its first quarter, boosted in part by e-commerce growth. The warehouse club said Black Friday was a record-breaking day for its digital business.

Mickey Mouse, meet ChatGPT. Disney announced a $1 billion equity investment in OpenAI yesterday. Under the agreement, users on OpenAI’s Sora video platform will be able to make content that features the entertainment giant’s copyrighted material — including more than 200 characters across the Disney universe.

Disney CEO Bob Iger told CNBC that the deal gives the company “a way in” to AI and will help it further reach younger consumers. OpenAI CEO Sam Altman said there will be limits on how Disney characters can be used in Sora videos.

Yesterday also marked OpenAI’s 10th anniversary. CNBC’s MacKenzie Sigalos takes you through the company’s transformation from a small, nonprofit research lab to the booming business it is today.

After the U.S. seized a tanker off Venezuela’s coast, a White House official told CNBC yesterday that Trump is willing to do it again. White House Press Secretary Karoline Leavitt also said that the tanker will be taken to a U.S. port where the oil it carried will be seized.

CNBC’s Lori Ann LaRocco found that the tanker in question, identified as the “Skipper,” had hid its location on multiple occasions since last year. Data suggests it has carried sanctioned oil from Iran and Venezuela since 2022.

Mover over, protein. Fiber is increasingly stealing the spotlight as shoppers focus on their gut health.

Data shows 22% of consumers listed high fiber content as a top-three factor when shopping, compared with 17% four years ago. On social media, the kids are calling it “fibermaxxing.”

As a result, companies such as Coca-Cola and Nestlé are rolling out fiber-focused drinks, CNBC’s Laya Neelakandan reports. PepsiCo also told CNBC that it’s planning to launch high-fiber versions of Smartfood and SunChips next year.