Oracle's AI Ambitions Face Investor Scrutiny Amid Soaring Capex

Oracle's shares plummeted 11% after cautionary forecasts and increased capital expenditure forecasts raised concerns about the slow payoff of its significant AI investments. The company faces investor scrutiny over potential AI bubbles and unfulfilled contracts as it plans further data center expansions.

Oracle faced a sharp 11% drop in shares during premarket trading following pessimistic forecasts and rising capital expenditures, sparking investor concerns about its substantial AI investment returns taking longer than anticipated.

Despite a 34% share ascent this year, driven by cloud-computing arrangements like OpenAI deals, Oracle's investors are now wary of an AI bubble marked by extravagant spending, high valuations, and modest productivity gains.

The firm's future cloud contracts metric fell short of Wall Street expectations, while CEO Clay Magouyrk mentioned potential financing strategies for data centers, indicating further challenges amid an unpredictable market landscape.

(With inputs from agencies.)