"Shares of Oracle have plunged 45% from their September high and lost 14% this week after a messy earnings report revealed it spent $12 billion in quarterly capital expenditures, higher than the $8.25 billion expected by analysts. Earnings guidance was also weak, and the company raised its forecast for fiscal 2026 capex by another $15 billion. The bulk of that is going into data centers dedicated to OpenAI, Oracle's $300 billion partner in the AI cycle."
"And by Friday, even the crown jewel of Oracle's AI strategy-its OpenAI data centers-was showing cracks. Bloomberg disclosed that Oracle has pushed back completion of some U.S. data centers for OpenAI from 2027 to 2028 because of "labor and material shortages." "It's perfectly plausible that they're seeing labor and materials shortages," said data-center researcher Jonathan Koomey, who has advised utilities and hyperscalers including IBM and AMD. In his view, the AI boom is running directly into the difference between digital speed and physical speed."
Oracle's stock plunged after the company reported $12 billion in quarterly capital expenditures, above analyst expectations, and raised fiscal 2026 capex guidance by $15 billion. Most of the new spending funds data centers being built for OpenAI. Cloud revenue and cloud-infrastructure sales missed expectations, intensifying concerns about how the company will finance massive outlays. Bloomberg reported delays pushing some U.S. OpenAI data centers from 2027 to 2028 due to labor and material shortages. Experts note the AI expansion faces physical constraints: rapid digital demand collides with slower, resource-limited construction and supply chains.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]