{"id":314204,"date":"2025-12-13T17:07:18","date_gmt":"2025-12-13T17:07:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/314204\/"},"modified":"2025-12-13T17:07:18","modified_gmt":"2025-12-13T17:07:18","slug":"disappointing-oracle-results-knock-80bn-off-value-amid-ai-bubble-fears-technology-sector","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/314204\/","title":{"rendered":"Disappointing Oracle results knock $80bn off value amid AI bubble fears | Technology sector"},"content":{"rendered":"

Oracle<\/a>\u2019s shares tumbled 15% on Thursday in response to the company\u2019s quarterly financial results, disclosed the day before.<\/p>\n

Roughly $80bn vanish from the value of the business software company co-founded by Donald Trump<\/a> ally Larry Ellison, falling from $630bn (\u00a3470bn) to $550bn and fuelling fears of a bubble<\/a> in artificial intelligence-related stocks. Shares in the chipmaker Nvidia, seen as a bellwether for the AI boom, fell after Oracle\u2019s.<\/p>\n

The drop extended a 11.5% fall during after-hours trading that followed results shwoing a lower-than-expected 14% rise in revenues to $16bn in the latest quarter.<\/p>\n

Investors were also spooked by Oracle<\/a> raising forecasts for its already-enormous 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 managing a growing debt pile. Oracle\u2019s long-term debt has surged by 25% over the past 12 months to $99.9bn. Even the cost of insuring its debt rose Thursday as investor confidence in the company waned.<\/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

\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 end 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. More recently, it 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 Oracle, 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

\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","protected":false},"excerpt":{"rendered":"Oracle\u2019s shares tumbled 15% on Thursday in response to the company\u2019s quarterly financial results, disclosed the day before.…\n","protected":false},"author":2,"featured_media":314205,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":{"0":"post-314204","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-technology","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/314204","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=314204"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/314204\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/314205"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=314204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=314204"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=314204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}