Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors

every morning.

Good morning.

Today is Friday, December 12th, and I'm your host, Kim Kahn, filling in for Julie Morgan.

The AI trade hit another speed bump, with Broadcom under pressure post-earnings on margin

concerns. Deutsche Bank's Jim Reid noted that after a 78% year-to-date rally with Broadcom under pressure post-earnings on margin concerns.

Deutsche Bank's Jim Reed noted that after a 78% year-to-date rally, Broadcom now has a larger market cap than Meta and Tesla, underscoring its central role in the AI narrative.

The company beat expectations in Q4 on the strength of continued AI spending, lifting

shares and extended trading on Thursday, until

CFO Kristen Spears flagged near-term margin pressure on the call. She said Q1 gross margin is

expected to fall about 100 basis points sequentially, largely because AI revenue is taking

a bigger share of the mix. Margins through 2026 will also depend on the balance between

infrastructure software,

semiconductors, and specific product lines. CEO Hawk Tan added that Broadcom has a $73 billion

backlog of AI product orders scheduled over the next six quarters. But that backlog includes

lower margin system sales, which will become a larger portion of revenue in the second half of

fiscal 2026. Lead time for new orders currently range from six months. margin system sales, which will become a larger portion of revenue in the second half of fiscal

2026. Lead time for new orders currently range from six months to a year, depending on the product.

Cannabis producer stocks are jumping on reports that President Donald Trump is expected to push

for reclassifying marijuana as a less dangerous drug. Tilray brands, canopy growth, Aurora Cannabis, Sundial

and Kronos Group are among the top movers. Trump is reportedly considering shifting

cannabis from Schedule 1, the category for substances with no accepted medical use, to Schedule 3,

...