Oracle's shares plummeted 15% on Thursday after the company released disappointing quarterly earnings, wiping off $80 billion from its market value. The tech giant's software business saw revenues rise only 14% to $16 billion in the latest quarter, well below expectations.
The drop is attributed to concerns over a potential AI bubble and Oracle's heavy investment in artificial intelligence-related technologies. The company has increased its capital expenditure by 40%, with most of it dedicated to building datacentres, sparking worries about debt levels. Long-term debt surged by 25% in the past year to $99.9 billion.
Oracle's cloud computing business grew at a slower pace than forecast, with revenues from infrastructure growing just 68%. Investors are also concerned about the company's reliance on financing within the AI ecosystem, with analysts warning that this could lead to a loss of investor confidence.
The company's forecast for capital expenditure has fueled fears that the AI boom may be more bubble-like than initially thought. Despite strong growth in revenue from customer contracts, analysts remain skeptical due to concerns over circular investments and the vulnerability of big tech companies to changing investor sentiment.
Oracle's shares are seen as a bellwether for the AI market, with its performance closely watched by investors. The company's significant investment in AI has been driven by its lucrative deals with OpenAI, the maker of ChatGPT. However, this growth is also seen as a concern, as it may lead to an over-reliance on financing within the AI ecosystem.
The current market sentiment suggests that investors are becoming increasingly cautious about the potential for AI technology to deliver on its promises. With policymakers and business leaders warning of stock market valuations tumbling if investor expectations are not met, Oracle's disappointing earnings have added fuel to these concerns.
The drop is attributed to concerns over a potential AI bubble and Oracle's heavy investment in artificial intelligence-related technologies. The company has increased its capital expenditure by 40%, with most of it dedicated to building datacentres, sparking worries about debt levels. Long-term debt surged by 25% in the past year to $99.9 billion.
Oracle's cloud computing business grew at a slower pace than forecast, with revenues from infrastructure growing just 68%. Investors are also concerned about the company's reliance on financing within the AI ecosystem, with analysts warning that this could lead to a loss of investor confidence.
The company's forecast for capital expenditure has fueled fears that the AI boom may be more bubble-like than initially thought. Despite strong growth in revenue from customer contracts, analysts remain skeptical due to concerns over circular investments and the vulnerability of big tech companies to changing investor sentiment.
Oracle's shares are seen as a bellwether for the AI market, with its performance closely watched by investors. The company's significant investment in AI has been driven by its lucrative deals with OpenAI, the maker of ChatGPT. However, this growth is also seen as a concern, as it may lead to an over-reliance on financing within the AI ecosystem.
The current market sentiment suggests that investors are becoming increasingly cautious about the potential for AI technology to deliver on its promises. With policymakers and business leaders warning of stock market valuations tumbling if investor expectations are not met, Oracle's disappointing earnings have added fuel to these concerns.
its like they're chasin gains instead of makin sense investments. 40% increase in capital expenditure sounds suspiciously like they're tryna keep up w/ openai's chatgpt craze, but at what cost? 
they gotta watch out for debt levels and investor confidence... can't afford to lose that 
. I was thinking, what if Oracle just overspent on AI tech? Theyre building datacentres left and right, thats not cheap 
. I'm kinda worried that we might be seeing an AI bubble burst soon... what if investors lose confidence in these tech giants? The whole market could tank 
.
And it's not just that, their AI business is growing at a slower pace than expected. Like, what's going on? Are they expecting an AI bubble to burst or something? 
They're already in debt by 25% and now they're pouring more cash into datacentres... It feels like they're trying to be too cool for school 
debt levels are a concern, i guess, but $80 billion dropped from market value? that's crazy! 
the cloud computing business isnt growing that fast, who cares 
.
. If investors start to lose confidence, it could lead to some pretty big problems for the company and the entire tech industry 
.
oracle's ai investments are like, super high risk 
we've seen companies like tesla and nvidia take huge risks for growth and they're still kicking it old school 
. I mean, we've seen this before with other tech companies, and it never ends well 
. And what's up with policymakers and business leaders warning of stock market valuations tumbling if investor expectations aren't met? It feels like they're just trying to justify their own fears 
. Meanwhile, this AI stuff is making tech giants like Oracle really rich... but what about the rest of us who aren't as lucky? It feels like we're just watching from the sidelines while the big players make all the money 
... not sure I'm comfortable with that level of investment 