Stock Market Today, Dec. 17: Broadcom Drops on China AI Chip Breakthrough and AI Buildout Uncertainty

Broadcom (NASDAQ:AVGO), which designs and supplies semiconductor devices and infrastructure software solutions, closed at $326.02, down 4.48%. Trading volume reached 73 million shares, coming in about 287% above versus its three-month average of 26 million shares.

How the markets moved today

Wednesday’s trading reflected renewed concern about AI chip profitability and competitive threats from Chinese AI developments, and investors are watching how Broadcom manages margins alongside VMware integration and AI infrastructure demand.

The S&P 500 (SNPINDEX:^GSPC) fell 1.15% to 6,722, while the Nasdaq Composite (NASDAQINDEX:^IXIC) lost 1.81% to close at 22,694. Among Semiconductors industry rivals, Nvidia (NASDAQ:NVDA) slid 3.81% and Intel (NASDAQ:INTC) dropped 3.38%, underscoring broad pressure on major AI-focused chipmakers.

What this means for investors

Rising competition from China had tech investors on their heels to start the day. It only got worse with reports that one private equity firm may not back an Oracle data center project as had been expected.

An ongoing Chinese government project to boost semiconductor self-sufficiency made a breakthrough, according to reports. While it has yet to result in working chips, a laboratory prototype represents progress.

Investors are also souring on names like Broadcom as questions arise around AI infrastructure funding. Reports today that Blue Owl Capital may not back the Oracle project as expected gave investors another reason to book profits today.

Howard Smith has positions in Broadcom, Intel, and Nvidia and has the following options: short February 2026 $170 calls on Nvidia and short January 2026 $26 calls on Intel. The Motley Fool has positions in and recommends Intel, Nvidia, and Oracle. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.