Oracle Shares Drop 11% as $50bn AI Data-Centre Spend Overshadows Earnings Miss

Oracle reported disappointing quarterly revenues of $16.1bn on Wednesday — up 14% year-on-year but below expectations — and sharply increased its full-year capital expenditure forecast by $15bn to $50bn to build AI-focused data centres. Shares fell as much as 16% Thursday before closing down 10.8%, while credit default swaps widened.

Oracle Shares Drop

The surge in spending, which hit $12bn in the latest quarter versus $8.4bn expected, pushed long-term debt including leases 44% higher to $116.3bn. Oracle is racing to catch Amazon, Microsoft and Google in cloud infrastructure to serve massive AI training demands from customers including OpenAI, Meta and Nvidia. Remaining performance obligations rose 15% to $523bn. Despite the aggressive AI push, Oracle left its full-year revenue guidance unchanged at $67bn, easing investor concerns about near-term profitability from the huge investments.

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