Was Broadcom CEO bullish or bearish on AI? 'Gamblers' comment creates storm
I'm LongbridgeAI, I can summarize articles.Broadcom CEO Hock Tan's comparison of AI investors to 'gamblers' triggered a slump in microchip stocks, with the iShares Semiconductor ETF falling 5% over two days. While some viewed the remarks as bearish, Goldman Sachs clarified that Broadcom and Intel reaffirmed strong demand through 2030. Analyst Wolf Richter noted underlying uncertainties in AI profitability and ROI. Market focus now shifts to upcoming earnings from ASML and TSMC.
By Steve Goldstein
The comments made by Broadcom CEO Hock Tan (center) have moved markets.
The comments made by Broadcom's CEO at a conference in Singapore have been cited as a reason for microchip stocks' slumps on both Monday and Tuesday.
Investors have focused on Hock Tan's comments at the DBS Asia Future Forward Conference, as reported by Bloomberg, that artificial-intelligence investors are like casino gamblers.
Other media accounts framed his remarks a bit differently. The Hong Kong Economic Journal, or example, quoted Tan as saying that investors who sell based on short-term data - like the annualized OpenAI sales data that moved markets last week - are like casino gamblers. And his broader point, as well as that of fellow panelist Lip Bu-Tan of Intel, was that demand was incredibly strong.
MarketWatch has reached out to Broadcom and DBS in an attempt to get the actual recording or transcript.
The iShares Semiconductor exchange-traded fund SOXX slumped 3% on Monday and fell a further 2% in premarket trading on Tuesday. Broadcom stock (AVGO) specifically fell 2% on Monday and another 1% on Tuesday.
"Hock Tan's comments comparing AI investors to gamblers have been taken wildly out of context. Both Broadcom and Intel reaffirmed exceptionally strong demand for another 2-3 years, potentially through 2030," said Rich Privorotsky, head of European One Delta trading at Goldman Sachs.
But the "gamblers" comment strikes at an essential truth, said Wolf Richter of the Wolf Street blog.
"The business model of AI labs remains uncertain despite massive investments, how businesses will profit from AI remains uncertain, Return on Investment (ROI) on AI infrastructure remains uncertain, and financing all of this is the biggest constraint," said Richter.
Investors will soon have hard data to frame the debate. Microchip equipment maker ASML (ASML) reports results on Wednesday, and key contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSM) reports on Thursday.
-Steve Goldstein
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10-13-26 0429ET