Analysis: U.S. Stocks Seek Reprieve After AI Sector Selloff (Dec 15, 2025)

This analysis is based on a Reuters [1] report published on December 15, 2025, noting U.S. and global stocks were “catching a break” after a sharp AI sector selloff in prior sessions. The selloff was driven by two key events: Oracle’s (ORCL) $248 billion AI data center lease commitment (a 148% quarter-over-quarter increase) pushing the company into a $10 billion free cash flow deficit [3][5], and Broadcom’s (AVGO) margin warning related to AI infrastructure costs [0][2].

Quantitative data from the Ginlix Analytical Database [0] shows significant price declines for AI-exposed stocks between December 10 and 12, 2025: Nvidia (NVDA) fell 4.77%, ORCL dropped 15.69%, and AVGO declined 12.84%. Broader indices also suffered: the Nasdaq Composite (^IXIC) fell 1.94%, while the S&P 500 (^GSPC) declined 0.86%. Trading volumes spiked, with AVGO’s volume reaching 95.59 million shares (3x its December 10 volume) [0], indicating strong selling pressure. The Reuters report highlighted a temporary reprieve on December 15, as investors awaited delayed U.S. economic data (inflation, employment) to reset 2026 interest rate expectations [1].

1. Sentiment Shift
   : The selloff marks a transition from AI euphoria to caution, driven by growing investor skepticism about the near-term profitability of massive AI infrastructure investments [4].
2. Valuation Differentiation
   : AI companies with proven profitability (e.g., NVDA, forward P/E below 30x [4]) face less pressure than those with high near-term capital expenditure requirements (e.g., ORCL, which raised fiscal year capex by $15 billion [3]).
3. Rate Sensitivity
   : Rising Treasury yields amplified the selloff, as they increase the cost of long-term AI projects and reduce the present value of future cash flows [1].

• AI Bubble Burst Risk
  : Wall Street analysts warn of a potential AI bubble, with prolonged selloffs possible if valuation skepticism deepens [4].
• Free Cash Flow Strain
  : Companies like ORCL with large AI infrastructure commitments face risks of credit rating downgrades and reduced shareholder returns [2][5].
• Interest Rate Impact
  : Further yield increases could exacerbate selling pressure on high-growth AI stocks [1].

• Valuation Reset
  : The selloff could create long-term entry points for investors seeking exposure to profitable AI companies with sustainable models [4].
• Rate Clarity
  : Delayed economic data may stabilize market sentiment by clarifying 2026 interest rate policies [1].

The December 15 Reuters report [1] documented a temporary reprieve for U.S. stocks after an AI selloff fueled by Oracle’s excessive spending [3][5] and Broadcom’s margin warning [0][2]. The selloff impacted major AI stocks and indices, with high trading volumes indicating strong selling pressure [0]. Sentiment has shifted from euphoria to caution due to concerns about AI investment payoffs and rising rates [4][1]. Decision-makers should monitor December 15 trading performance, delayed economic data, Oracle’s cash flow trajectory, and Broadcom’s margin recovery [2][3].