"(Bloomberg/Brody Ford and Ian King) Oracle Corp. shares fell the most in more than 24 years after the company reported a jump in spending on AI data centers and other equipment, rising outlays that are taking longer to translate into cloud revenue than investors want. Capital expenditures, a metric of data center spending, were about $12 billion in the quarter, an increase from $8.5 billion in the preceding period, the company said Wednesday in a statement. Analysts anticipated $8.25 billion in capital spending in the quarter, according to data compiled by Bloomberg."
"Fiscal second-quarter cloud sales increased 34% to $7.98 billion, while revenue in the company's closely watched infrastructure business gained 68% to $4.08 billion. Both numbers fell just short of analysts' estimates. The shares plunged as much as 16% after markets opened in New York on Thursday, their biggest intraday decline since March 2001, erasing about $102 billion in market value. Oracle's stock had already lost about a third of its value through Wednesday's close since a record high on Sept. 10."
Oracle increased capital expenditures to about $12 billion in the quarter, up from $8.5 billion previously and above analyst forecasts. Fiscal second-quarter cloud sales rose 34% to $7.98 billion, and infrastructure revenue climbed 68% to $4.08 billion, but both missed estimates. Shares dropped as much as 16%, wiping out roughly $102 billion in market value and sending credit-risk measures to multi-year highs. Remaining performance obligations surged more than fivefold to $523 billion. The company is investing heavily in data centers to support AI customers such as OpenAI, ByteDance's TikTok and Meta, while taking on significant debt and leases.
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