Welcome to the forefront of conversational AI as we explore the fascinating world of AI chatbots in our dedicated blog series. Discover the latest advancements, applications, and strategies that propel the evolution of chatbot technology. From enhancing customer interactions to streamlining business processes, these articles delve into the innovative ways artificial intelligence is shaping the landscape of automated conversational agents. Whether you’re a business owner, developer, or simply intrigued by the future of interactive technology, join us on this journey to unravel the transformative power and endless possibilities of AI chatbots.
CEO Hock Tan revealed that Anthropic is the $10 billion mystery customer announced last quarter, and that the company has since secured a fifth major customer for AI chips.
Custom chip specialist Broadcom rallied after delivering a top- and bottom-line beat in Q4 along with a robust outlook for the current quarter, but those gains fizzled out and turned to deep declines during the conference call. Shares are down nearly 9% in early trading on Friday.
The results:
Guidance for Q1 2026 was ahead of what Wall Street had penciled in:
“We see the momentum continuing in Q1 and expect AI semiconductor revenue to double year-over-year to $8.2 billion, driven by custom AI accelerators and Ethernet AI switches,” President and CEO Hock Tan said.
That guidance for its AI book of business is a whopping 20% above the consensus estimate for the current quarter.
Management also announced an increase in the quarterly dividend to $0.65 from $0.59.
On the conference call, Tan said the mystery $10 billion new customer announced during the previous quarter’s earnings call was Anthropic, maker of the Claude chatbot. He added that Broadcom has received an additional $11 billion order from Anthropic, and has also secured a $1 billion order from a fifth major customer for AI products.
Shares reversed gains of as much as 4% to turn deeply negative after those comments from the CEO. The declines may be tied to the relatively small order from this one new customer, which pales in comparison to what Tan unveiled following Q3 results, as well as fears this recent business growth is lower-margin in nature.
The Anthropic sales are somewhat of an extension of its Google business, as Broadcom is selling it the Ironwood TPUs that it developed with the search giant. Morgan Stanley analyst Joseph Moore suggested that some of the margin from these Anthropic sales will therefore go to Google, and flagged that selling racks rather than custom chips alone (as Tan indicated on the call) carries a lower margin, as well.
Bank of America analyst Vivek Arya called worries about profitability a “fair concern” and lowered his estimates for gross margins for the next two fiscal years while maintaining a buy rating and boosting his price target to $500 from $460.
Tan said that margins would compress because of this growth in AI sales, which has lower profitability than its software business. During the call, he faced questions about the potential for customers to disintermediate Broadcom from the high-margin parts of the chip design business by taking a customer-owned tooling approach, with would, if realized, further weigh on profitability.
Under this view, Broadcom’s margins would become its customers’ cost savings.
“This concept of customer tooling is an overblown hypothesis, which frankly, I don’t think will happen,” Tan said.
In total, Broadcom has a $73 billion AI backlog it expects to realize within the next 18 months, per the CEO, who later called this amount a “minimum” for sales over the next six quarters. The consensus estimate for cumulative AI product sales over the next six quarters is roughly $69 billion.
Tan added that he doesn’t expect Broadcom’s pact with OpenAI, announced in October, to drive much business in 2026.
Broadcom’s sharp pullback may be a function of how high enthusiasm regarding its prospects had gotten ahead of this report. Google’s Gemini 3 model, which received rave reviews, was trained on those aforementioned custom TPUs that it codesigned with Broadcom. Since November 20, when the S&P 500 hit an intermediate bottom, Broadcom’s rally had left its main AI chip competitors, Nvidia and Advanced Micro Devices, in the dust.
In fact, Broadcom’s 12-month forward price-to-earnings ratio stood at a record premium to rival Nvidia’s heading into earnings, with Bank of America having argued that this means traders are pricing that the custom chip maker will take some AI market share away from the dominant incumbent.
Nvidia’s “House of GPUs” is looking a little wobbly.
Shares of Applied Digital, CoreWeave, and Nebius — three of the four biggest equity positions held by the chip designer as of September 30 — are getting crushed on Monday.
Nvidia owned about $3.6 billion worth of these data center and neocloud stocks (with the overwhelming majority in CoreWeave) per its most recent 13F filing.
The AI credit risk that’s been most talked about in reference to Oracle’s widening credit default swaps spreads is also present in some of these firms, as well.
An Applied Digital bond due in 2030 is trading below $96 for the first time this month. That issuance was made to support data centers where CoreWeave will be the main tenant.
CoreWeave, which earlier this year received warrants enabling it to purchase a large chunk of Applied Digital shares as part of a data center leasing deal, sank last week after announcing a $2 billion convertible note offering that was later upsized.
Of course, it’s not just Nvidia-owned stocks, but the entire data center ecosystem that’s under pressure on Monday. Cipher Mining and IREN are also getting walloped — with Monday’s crypto tumble also likely weighing on these two bitcoin miners turned data center companies.
Analysts at Evercore ISI began coverage of AI energy play GE Vernova with an “outperform” rating and a price target of $860 on Monday, citing a number of reasons to be bullish about the maker of turbines used for power generation. Evercore’s price target implies gains of roughly 27% for the shares.
Analysts at the shop wrote of GE Vernova:
“1) Growth is strong and well supported by backlog in both Power and Electrification… with visibility into the 2030s. Despite headwinds from a shrinking Wind business, we see 12% CAGR 2026-28E, the strongest growth ex-Siemens Energy in our coverage.
2) Margin is expanding with operating leverage, pricing & productivity in both Power & Electrification. Full ownership of Prolec should drive another step up in estimate revisions upon closing (mid-2026). The equipment dynamics (pricing, margin expansion) should repeat in the service business 2030+.
3) Shareholder returns are very well supported, with EBITDA margins rising from 7% in 2024 to 21% in 2028 and FCF of >$5bn pa on average — recent buyback upgrade to $10bn (vs. $6bn prior) and dividend increase amplify an already attractive growth algorithm.”
There are some risks to the rally for the shares, which have more than doubled this year. For instance, the company’s struggling wind power division could weigh on results. Also, the high valuations on the stock — its forward price-to-earnings ratio is roughly 55x — make it vulnerable to rapidly shifting investor vibes toward AI, analysts say.
“Investment sentiment is tied up in the AI/Data centre cycle, so any suggestion of delays or diminished energy demand would weigh on the stock as investors would fear over-capacity,” they noted.
Nvidia extended gains in early trading after announcing an updated edition of its open models, the Nemotron 3.
This family of models comes in three “sizes”: Nano (available today), Super, and Ultra (both expected to be launched in the first half of next year). These sizes reflect the different parameters of each model, which govern the complexity of a given request it can handle.
The company highlighted the flexibility benefits of these models, saying they can be integrated with proprietary counterparts to produce cost savings.
“As multi-agent AI systems expand, developers are increasingly relying on proprietary models for state-of-the-art reasoning while using more efficient and customizable open models to drive down costs,” per the press release. “Routing tasks between frontier-level models and Nemotron in a single workflow gives agents the most intelligence while optimizing tokenomics.”
This strong start to the week helps reverse a substantial run of underperformance from Nvidia versus its peers. It’s the only member of the VanEck Semiconductor ETF that’s declined since the S&P 500 closed at an intermediate bottom on November 20.
Last week, the chip designer closed at its lowest level compared to this fund of 2025, falling below the trough seen in the wake of the DeepSeek freak-out, where nearly $600 billion in market cap was obliterated in a single session.
Opendoor is surging this morning after announcing that Lucas Matheson, CEO of Coinbase Canada, will be its next president.
Management changes have been a key catalyst for Opendoor Technologies as the online real estate company looks to reverse its fortunes. Shares booked a record one-day gain of nearly 80% on September 11, following its announcement that cofounders Keith Rabois and Eric Wu were rejoining the company to serve on its board of directors and that Shopify COO Kaz Nejatian would serve as CEO. Matheson worked at Shopify from 2016 to 2021, with his tenure overlapping with Nejatian’s for two years.
Per the press release, Matheson will “oversee Corporate Development, Financial Planning & Analysis, and emerging strategic initiatives, including the Company’s exploration of how blockchain technology and tokenization might create new pathways to homeownership.”
Traders have enthusiastically greeted previous rumors and reports that Opendoor would pursue real estate tokenization, as this would seem to de-risk the inventory of homes it holds on its balance sheet by enhancing the liquidity for those assets, freeing up the company to go after even higher volumes.
In addition, Opendoor also said that Christy Schwartz would be its permanent CFO, after she was appointed to that position on an interim basis in September.
“We looked everywhere,” Nejatian said in the press release. “We talked to CFOs from nearly every sector. And we realized the person with the deepest command of our business, the trust of every team, and the bias for action we need was already here.”
ServiceNow is deep in the red in premarket trading Monday after Bloomberg reported that the software company is in “advanced talks” to buy cybersecurity firm Armis for up to $7 billion, citing people familiar with the situation.
In early November, a pre-IPO funding round valued Armis at $6.1 billion. The firm touts United Airlines, Mondelez, “3 of 5 largest retailers in the US, 3 out of 5 largest banks and many more” as customers, and said in August that it had surpassed $300 million in annual recurring revenue.
A stake in Armis is a hot commodity. CEO Yevgeny Dibrov told Bloomberg in September that it was weighing six to seven offers from investors — one of whom was reported to be private equity firm Thoma Bravo — that were looking to take a position in the firm.
“ServiceNow’s possible acquisition of Armis, as reported by Bloomberg News, would help its IT asset management practice, which complements its much larger IT service management business,” Bloomberg Intelligence analysts Anurag Rana and Andrew Girard wrote. “Though ServiceNow isn’t a pure-play cybersecurity vendor, Armis could help provide bundled services amid rising threats, especially with increased use of LLMs.” However, they also noted that “the reported deal price of $7 billion to gain $300 million in annualized recurring revenue seems expensive.”
Along with this news, KeyBanc analyst Jackson Ader also downgraded shares of ServiceNow to “underweight” from “sector weight,” with a price target of $775, warning that the software company is facing stiff competition from Microsoft’s Agent 365.