Global semiconductor stocks, including Broadcom Inc Broadcom Inc (AVGO), retreated after President Donald Trump and Chinese President Xi Jinping wrapped up their summit without announcing major chip agreements or a clear breakthrough on NVIDIA Corp's Nvidia (NVDA) China business, dampening investor expectations across the AI supply chain.
Investors had expected Trump's China trip to produce tangible progress for Nvidia after CEO Jensen Huang joined a delegation that included Apple Inc Apple (AAPL) CEO Tim Cook and Tesla Inc Tesla (TSLA) CEO Elon Musk.
Although Washington authorized Nvidia to export H200 chips to China, Beijing has not formally approved shipments.
Danni Hewson, AJ Bell head of financial analysis, told the Wall Street Journal on Friday that investors had hoped the summit would yield positive developments that could further boost Nvidia's sales momentum.
However, U.S. Trade Representative Jamieson Greer later said Nvidia and semiconductor issues were not a primary focus during the summit discussions.
Global Chip Stocks Slide On Trade Uncertainty
The lack of progress triggered broad selling across semiconductor stocks globally.
The pullback interrupted a strong rally that had recently pushed AI-linked semiconductor stocks higher as investors poured money into companies tied to data-center infrastructure and artificial intelligence demand.
Export Controls Continue To Pressure AI Chip Trade
Washington continues restricting advanced semiconductor exports to China over concerns that the technology could support military applications or accelerate China's AI capabilities.
The restrictions have encouraged Beijing to strengthen domestic chip production and reduce reliance on U.S. technology suppliers.
Greer said China ultimately controls whether it buys Nvidia chips, adding that Chinese policymakers remain heavily focused on supporting domestic semiconductor development because they often view advanced U.S. technology as a competitive threat.
Broadcom shares remained in focus as investors evaluated the company's expanding AI partnerships, financing discussions tied to OpenAI, and bullish analyst expectations around long-term AI infrastructure demand.
OpenAI Chip Project Faces Financing Challenge
Reportedly, Broadcom's AI chip partnership with OpenAI hit an $18 billion financing hurdle tied to the first phase of chip production.
According to The Information, Broadcom wants Microsoft Corp Microsoft (MSFT) to commit to buying roughly 40% of the chips before moving forward with financing for the initial 1.3-gigawatt deployment. Under the proposed arrangement, Microsoft would host the chips in its data centers and lease computing capacity back to OpenAI.
The report said Broadcom views Microsoft's purchase commitment as essential to ensuring repayment confidence, while OpenAI sees the project as critical to lowering long-term server costs and improving margins as it targets more than $200 billion in operational spending through 2029.
Broadcom Expands AI Infrastructure Partnerships
Bloomberg reported that Apollo Global Management and Blackstone are discussing a potential $35 billion financing package with Broadcom to support AI chip development.
Broadcom has also expanded long-term AI partnerships with Alphabet Inc's Alphabet (GOOGL) Google, Anthropic and Meta Platforms Inc Meta (META) as hyperscalers continue increasing investments in artificial intelligence infrastructure.
Goldman Sachs Sees Long-Term AI Tailwinds
Goldman Sachs analyst James Schneider reiterated a Buy rating on Broadcom and maintained a $480 price forecast, according to The Street.
Schneider said the rise of "agentic AI" could significantly increase global token consumption as AI systems handle more search, shopping, travel, email and enterprise-related tasks.
He added that hyperscalers and large language model providers are likely to continue boosting AI infrastructure spending, creating favorable long-term demand conditions for semiconductor companies such as Broadcom.
AVGO Price Action: Broadcom shares were down 2.23% at $429.59 at publication on Friday. The stock is approaching its 52-week high of $442.36, according to market data.
