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Oracle Shares Slide as Investors Assess AI Spending Risks
Oracle is a large company that provides software and cloud services.
Its shares fell while investors waited for its latest earnings report.
Investors are worried because Oracle is borrowing and spending heavily to build infrastructure for artificial-intelligence services.
This spending could leave the company with negative cash flow for several years.
At the same time, analysts expect Oracle’s earnings and revenue to grow strongly.
They also expect its cloud infrastructure business to more than double from the same quarter last year.
Oracle’s stock has recovered from its July low but remains far below its record high.
The company may continue spending tens of billions of dollars to expand its capacity.
Investors are weighing the promise of faster cloud growth against the risks from debt and cash outflows.
Oracle shares fell 3.44% to $155.94 ahead of its quarterly earnings report.
Investors remain concerned about Oracle’s rising debt and heavy artificial-intelligence infrastructure spending.
Analysts expect fiscal first-quarter earnings and revenue to increase by roughly 30%.
Cloud infrastructure revenue is projected at $7.2 billion, up from $3.3 billion a year earlier.
Capital expenditure could approach $20 billion for the quarter and nearly $93 billion in fiscal 2027.
- Who
- Oracle Corp. and its investors, with Wall Street analysts forecasting the company’s results.
- What
- Oracle shares declined ahead of quarterly earnings as investors focused on debt, artificial-intelligence infrastructure spending and projected cash-flow losses.
- Where
- In the U.S. stock market; Oracle’s shares were quoted at $155.94 at 12:28 p.m. EDT.
- When
- Thursday, ahead of the earnings report due after the U.S. market closed; the fiscal first quarter ended August 31.
- Why
- Investors are concerned about Oracle’s rising debt and large capital-spending requirements, despite expected growth in earnings and cloud revenue.
Growth and Expansion Case
Financial Risk Case
Cloud growth
Growth and Expansion Case
Analysts expect strong earnings, revenue and cloud infrastructure growth, with cloud revenue projected at about $7.2 billion.
Financial Risk Case
The growth requires substantial investment, which is expected to weigh heavily on Oracle’s cash flow.
Artificial-intelligence infrastructure spending
Growth and Expansion Case
Large infrastructure investments could help Oracle expand capacity to meet demand linked to artificial intelligence.
Financial Risk Case
Investors are concerned that the spending programme will increase debt and expose Oracle to major spending risks.
Stock valuation
Growth and Expansion Case
Oracle’s valuation multiple has declined, making the shares appear relatively inexpensive compared with a year earlier.
Financial Risk Case
The stock remains more than half below its record high and is down 19% in 2026, reflecting continuing investor concerns.
Key facts
- Share price movement
- Oracle shares were down 3.44%, or $5.69, at $155.94 at 12:28 p.m. EDT on Thursday.
- Expected earnings growth
- Analysts expect fiscal first-quarter earnings per share to rise by approximately 30%.
- Expected revenue growth
- Quarterly revenue is projected to increase by nearly 30%.
- Cloud infrastructure revenue
- Revenue is estimated at approximately $7.2 billion, compared with $3.3 billion a year earlier.
- Quarterly capital expenditure
- Capital expenditure is forecast to approach $20 billion for the quarter.
- Quarterly free cash flow
- Free cash flow is projected at roughly negative $10 billion.
- Fiscal 2027 spending
- Capital expenditure is projected to reach nearly $93 billion, while free cash flow is forecast at negative $46.6 billion.
Sources
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