Oracle stock dropped after it reported disappointing revenues on Wednesday alongside a $15 billion increase in its planned spending on data centers this year to serve artificial intelligence groups.
Shares in Larry Ellison’s database company fell 11 percent in pre-market trading on Thursday after it reported revenues of $16.1 billion in the last quarter, up 14 percent from the previous year, but below analysts’ estimates.
Oracle raised its forecast for capital expenditure this financial year by more than 40 percent to $50 billion. The outlay, largely directed to building data centers, climbed to $12 billion in the quarter, above expectations of $8.4 billion.
It’s interesting to see how fluctuations in spending can impact stock performance. The data center investments highlight the ongoing challenges and opportunities in the tech industry. It will be intriguing to see how Oracle navigates this situation moving forward.
You’re absolutely right; spending can greatly influence stock prices. It’s also worth noting how increased investments in data centers might signal Oracle’s strategy to enhance their cloud capabilities, which could be crucial for their long-term growth.