US EditionOracle Stock Is Tumbling Tuesday: Here's Why - Oracle (NYSE:ORCL)
Oracle's cloud AI chip rentals generated $900 million in sales with a 14% gross margin, highlighting profitability challenges despite rapid growth and major AI infrastructure projects.
- Tuesday, The Information published a report based on internal Oracle Corp. documents that raised questions about plans to buy billions of Nvidia Corp. chips, causing shares to slip about 5% and broader stocks and crypto to fall.
- The report found that high GPU costs and aggressive pricing pressured gross margins, with Oracle Corp. losing nearly $100 million on Nvidia's Blackwell chips rentals this year, especially on deals involving fewer than 1,000 GPUs.
- Internal Oracle documents show Nvidia-powered server rentals earned $125 million gross profit on $900 million sales in the quarter ending in August, reflecting a 14% margin.
- Safra Catz last month said `We signed four multi-billion-dollar contracts with three different customers in Q1` while executives touted a $381 billion projection, but Oracle won't report again until December.
- A forecast of $144 billion by 2030 ties Oracle to the Stargate project with OpenAI and SoftBank, but thin margins highlight risks in building Nvidia-heavy AI data centers.
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11 Articles
Oracle Stock Is Tumbling Tuesday: Here's Why - Oracle (NYSE:ORCL)
Shares of Oracle Corp (NASDAQ:ORCL) are falling Tuesday after The Information reported that the company is facing financial struggles related to renting out Nvidia chips. What To Know: The Information cited internal Oracle data indicating the company lost nearly $100 million last quarter renting out Nvidia Corp’s (NASDAQ:NVDA) Blackwell chips. The report also indicates that Oracle’s gross profit margin from rentals of servers powered by Nvidia c…
Oracle’s AI Surge Hits Profit Snags: Shares Drop 7% on Thin Margins
Oracle Corp. has ridden a wave of investor enthusiasm this year, emerging as the top-performing megacap stock in 2025. Executives at the database giant last month touted projections of $381 billion in revenue from renting out specialized cloud servers to artificial intelligence developers like OpenAI, positioning the company as a key player in the AI infrastructure boom. But beneath the rosy forecasts, internal documents reveal a starkly differe…
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