Oracle Corporation had more than $70 billion wiped off its stock market value yesterday after the American computer software company reported disappointing cloud sales as it continued to invest huge sums in artificial intelligence data centres.<\/p>\n
Technology investors are worried about an AI bubble as some analysts point to elevated valuations, unclear productivity gains and circular investments. <\/p>\n
Oracle warned on Wednesday that capital expenditures, which include data centre spending, were expected to reach $50 billion in the year to the end of May 2026, a $15 billion increase from the company\u2019s estimates in September.<\/p>\n
\u2022 AI bubble is fuelled by debt, Bank of England warns<\/a><\/p>\n The company reported a 34 per cent rise in second-quarter cloud sales to $7.98 billion and a 68 per cent rise in revenue from the company\u2019s infrastructure business to $4.08 billion. However, both figures missed analysts\u2019 estimates. At least 13 brokerages cut their price targets on Oracle\u2019s stock. Oracle closed down $24.17, or 10.8 per cent, at $198.84 in New York on Thursday night.<\/p>\n Oracle, based in Texas, was founded in 1977 as a provider of packaged computer software to businesses and still operates in that area as well as in hardware. <\/p>\n It has long been in the shadow of younger tech groups such as Amazon, Microsoft and Google. However, its shares surged in September<\/a> when the company outlined surprisingly strong quarterly earnings<\/a> which demonstrated growing demand for its relatively low-cost cloud infrastructure services. It has recently signed significant cloud-computing deals with tech companies such as OpenAI.<\/p>\n