{"id":341487,"date":"2025-12-11T10:33:07","date_gmt":"2025-12-11T10:33:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/341487\/"},"modified":"2025-12-11T10:33:07","modified_gmt":"2025-12-11T10:33:07","slug":"disappointing-oracle-results-knock-70bn-off-value-amid-ai-bubble-fears-technology-sector","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/341487\/","title":{"rendered":"Disappointing Oracle results knock $70bn off value amid AI bubble fears | Technology sector"},"content":{"rendered":"

Oracle\u2019s disappointing results have knocked more than $70bn off the value of software and data company co-founded by Trump ally Larry Ellison, adding to fears of a bubble<\/a> in AI-related stocks.<\/p>\n

Shares in the company fell by 11.5% overnight after it reported a lower-than-expected 14% rise in revenues to $16bn (\u00a312bn) in the latest quarter while revealing it was boosting its AI spending by about $15bn.<\/p>\n

The business posted weaker-than-expected quarterly revenues for the three months to the end of November, as sales at its cloud computing business grew at a slower pace than forecast at 34%.<\/p>\n

Investors were also disappointed by a slower than expected 68% growth in revenues from its infrastructure business.<\/p>\n

At the same time, investors were spooked by Oracle<\/a> raising forecasts for investment in AI. It expects capital expenditure to jump by 40% to $50bn, with the bulk of the increase aimed at building datacentres.<\/p>\n

The company is already managing a growing debt pile, with Oracle\u2019s long-term debt having surged 25% over the past 12 months to $99.9bn.<\/p>\n

\u201cFrankly, the report was not dramatically bad, but it came to confirm concerns around heavy AI spending, financed by debt, with an unknown timeline for revenue generation,\u201d Ipek Ozkardeskaya, a senior analyst at Swissquote, said.<\/p>\n

Continued optimism about the potential for AI technology has led to a leap in company valuations in recent months,<\/a> but there has been a growing spate of warnings from policymakers and business leaders who say stock market valuations could tumble if investors ended up being disappointed by the progress or adoption of AI technology.<\/p>\n

Oracle became an important tech player creating software for Fortune 500 firms around the world, but more recently found strength in cloud computing, having become the fastest-growing competitor to Amazon, Microsoft and Google. The surge in AI has also been a boon to the company, which has entered lucrative deals with the likes of OpenAI, the maker of ChatGPT.<\/p>\n

However, there are also growing concerns about how reliant companies are becoming on each other\u2019s financing <\/a>within the AI ecosystem. Oracle said overnight that its measure of revenue from customer contracts rose by 440% over the past year, but analysts were wary when it emerged that the contracts were driven by new commitments from Meta and Amazon.<\/p>\n

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\u201cAlthough these are two solid customers, it will not placate fears that big tech\u2019s AI investments are becoming circular, which leaves it vulnerable to a loss of investor confidence,\u201d Kathleen Brooks, a research director at XTB, said.<\/p>\n

\u201cOverall, strong contract growth was not enough to placate fears about AI and the huge amount of [capital expenditure] spending required by companies to build AI infrastructure.\u201d<\/p>\n

Other AI and tech-related stocks also slid in after-hours trading after the Oracle results. Nvidia\u2019s share price fell by 1.3%, while Google owner Alphabet fell by 0.3%. In Japan, AI investor SoftBank\u2019s shares fell by 7.7% on Thursday.<\/p>\n","protected":false},"excerpt":{"rendered":"Oracle\u2019s disappointing results have knocked more than $70bn off the value of software and data company co-founded by…\n","protected":false},"author":2,"featured_media":341488,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[256,254,255,64,63,105],"class_list":{"0":"post-341487","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-au","12":"tag-australia","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/341487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=341487"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/341487\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/341488"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=341487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=341487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=341487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}