Broadcom Inc. (AVGO) surged 7.2% to close at $332.92 on Friday, marking a significant rebound as investor enthusiasm for artificial intelligence infrastructure spending reignited. The semiconductor stock's advance pared its decline from a December high of $414.61, though shares remain approximately 19.7% below that peak.
Chip Stocks Rally on Cloud Spending Plans
The rally followed announcements from Amazon and Alphabet outlining expanded capital expenditures for AI data centers. While Amazon shares fell 5.6% after warning of a more than 50% increase in capital spending this year, chipmakers broadly gained as investors anticipated increased demand for servers, networking hardware, and custom semiconductors. "Real demand can lure buyers back in after a selloff," noted Ross Mayfield, investment strategy analyst at Baird.
Market participants are carefully evaluating which companies will genuinely benefit from the AI investment cycle versus those facing margin pressure. "Rotation is the dominant theme this year," said Angelo Kourkafas, senior global investment strategist at Edward Jones. Matthew Miskin of Manulife John Hancock Investments observed that the previous environment where "AI lifted all ships" has given way to more selective positioning.
Upcoming Catalysts and Regulatory Scrutiny
Investor attention now shifts to key economic indicators and Broadcom's upcoming earnings. The U.S. Bureau of Labor Statistics will release January employment data on Wednesday, February 11, followed by Consumer Price Index figures on Friday, February 13. Broadcom is scheduled to report fiscal first-quarter 2026 results after the market closes on Wednesday, March 4.
Meanwhile, regulatory challenges persist. Bloomberg reported that Broadcom faces a potential full-scale European Union antitrust investigation focusing on alleged VMware licensing practices. Despite this overhang, the company remains viewed as a key barometer for AI infrastructure investment, often moving in tandem with peers like Nvidia and AMD when traders reposition around the theme.
