Oracle's AI Spending Sparks Market Jitters, Shares Plummet

Oracle shares fell 15.6% as concerns rose over its massive AI investments and unclear returns, resulting in a potential $93 billion market value loss. This slump affected other tech stocks like Nvidia and Micron, amidst worries of an AI bubble and increased capital expenditures.

Oracle's shares experienced a significant decline of 15.6% on Thursday, sparking concerns across the technology sector. This drop was largely attributed to mounting worries over Oracle's substantial investments in artificial intelligence, as well as the absence of a clear timeline for returns on these ventures. Should these losses persist, Oracle is projected to shed an estimated $93 billion in market value.

The downturn rippled through the tech industry, affecting peers such as Nvidia, Micron, and CoreWeave, whose stocks fell between 0.9% and 7.7% during early trading hours. Investors are increasingly alarmed by what they perceive as an AI bubble, fueled by soaring valuations, limited tangible productivity gains, and complex investment dynamics.

Oracle's recent warning about capital expenditures for fiscal 2026, now expected to surpass initial estimates by $15 billion, exacerbated these concerns. In an effort to stave off competitors like Amazon, Microsoft, and Google, Oracle has entered into cloud-computing agreements with OpenAI and others, supporting its nearly 34% stock growth this year.

(With inputs from agencies.)